Cash Basis Accounting

Accounting & Bookkeeping Glossary

Definition

Cash basis accounting records income when you receive payment and expenses when you actually pay them. It's simpler than accrual and works fine for smaller businesses, but it can give you a misleading picture of profitability — especially if you have large outstanding invoices or prepaid expenses. Most businesses outgrow it.

Need help with cash basis accounting?

Learn more about our professional bookkeeping services and how we can help your business.

Professional Bookkeeping Services

Need bookkeeping help?

Let Steph's Books handle your books so you can focus on running your business.