All businesses must choose a cash or accrual system of accounting for tax purposes. The Internal Revenue Service allows small businesses to do their accounting on an accrual basis to make good business decisions and to file taxes on a cash basis to minimize taxes. You can change your accounting structure from accrual to cash in QuickBooks if it provides you with a current tax benefit and a future tax benefit. Change your company preference to reflect your new cash-based system of accounting.
Open your QuickBooks software and click “File” on the main menu.
Select “Preferences,” then “Reports and Graphs” from the drop-down menu.
Click “Cash Method” under "Company Preferences." Click “OK.”