Cash basis accounting
Recording revenue and costs only when money actually moves.
Last reviewed 12 September 2026
Simple and honest about liquidity, but it distorts performance: a big December collection makes December look brilliant and November look terrible.
Fine for very small businesses. Once you have payment terms or subscriptions, you need the accrual view alongside it.
Frequently asked
What is cash basis accounting?+
Recording revenue and costs only when money actually moves. Simple and honest about liquidity, but it distorts performance: a big December collection makes December look brilliant and November look terrible. Fine for very small businesses. Once you have payment terms or subscriptions, you need the accrual view alongside it.
Why does cash basis accounting matter for founders?+
Fine for very small businesses. Once you have payment terms or subscriptions, you need the accrual view alongside it.
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