From Cash-Basis to Audit-Ready: A 90-Day US GAAP Roadmap

The jump from cash-basis accounting to full US GAAP compliance feels enormous — and for good reason. Revenue recognition rules change, accruals appear for the first time, and suddenly you need a reserve methodology for doubtful accounts. But with a structured 90-day plan, the transition is manageable and the payoff is immediate: investor confidence, cleaner bank covenants, and a finance function that scales with the business.

Days 1–15: Chart of accounts restructuring

Most cash-basis companies run a flat, bloated chart of accounts. We start by mapping every existing account to a GAAP-compliant structure with proper hierarchies: operating vs. non-operating revenue, cost of goods sold separated from SG&A, and balance-sheet accounts that support intercompany eliminations. The new chart of accounts becomes the backbone of every report going forward.

Days 16–35: Revenue recognition (ASC 606)

ASC 606 requires companies to recognize revenue when (or as) performance obligations are satisfied — not simply when cash is collected. We work with the sales and operations teams to identify each distinct performance obligation in your contracts, determine the transaction price, and build a revenue waterfall that the auditors can trace from contract to journal entry.

Days 36–55: Accruals, prepaids, and reserves

Under GAAP, expenses must be matched to the period in which they are incurred. We establish accrual schedules for payroll, insurance, rent, and other recurring costs. We also implement a reserve methodology for doubtful accounts based on historical write-off rates and aging analysis — a common audit focus area.

Days 56–75: Financial statement preparation

With the new chart of accounts populated and accruals in place, we produce a full set of GAAP-compliant financial statements: income statement, balance sheet, cash-flow statement, and statement of stockholders' equity. Each line item is supported by a reconciliation workpaper that ties back to the general ledger.

Days 76–90: Audit preparation and PBC list

The final stretch is dedicated to building the Prepared by Client (PBC) list — the package of documents the auditors will request. This includes bank confirmations, debt agreements, lease schedules, related-party disclosures, and management representation letters. We conduct a mock audit review to identify and resolve any findings before the real auditors arrive.

The result

By day 90 your company has a clean set of GAAP financials, a documented accounting policy manual, and a PBC package ready for the auditors. More importantly, your finance team now operates on a framework that scales — whether you are raising a Series A, negotiating a credit facility, or preparing for an acquisition.