Cash-Basis vs. Accrual Accounting for Small Business

The Core Difference

Cash basis generally records income when received and expenses when paid. Accrual basis generally records income when earned and expenses when incurred.

Why Some Small Businesses Use Cash-Basis Bookkeeping

Cash-basis reporting can be simpler and can provide a straightforward view of cash activity. It can fit some service businesses, consultants, contractors, and other small operations, but it is not appropriate for every business. Accounting and tax-method requirements vary, so businesses should confirm the appropriate method with their tax professional.

Statement-Driven Cash-Basis Financials

For businesses where cash-basis bookkeeping is appropriate, CheckOff Books provides statement-based cash-basis bookkeeping without requiring accounting-software logins or bank linking.