Finance
Cash accounting
Cash accounting records revenue when payment is received and expenses when they are paid. It is simpler than accrual accounting and is available for tax purposes to many small US businesses, subject to entity type, revenue level and whether inventory is held.
In plain terms: Recording money when it actually moves.
Why it matters
Perfectly adequate for a service business paid on receipt, and genuinely simpler. Eligibility for tax purposes depends on your specific facts, so confirm against current IRS rules rather than assuming.
Read the full guideBookkeeping