When it comes to keeping track of your business finances, there are two main accounting methods to choose from: cash accounting and accrual accounting.
Although both methods have their benefits and drawbacks, cash accounting tends to be the simplest way of recording revenue and expenses because you can update your accounts using your bank transactions rather than having to stay on top of all your invoices and bills as well.
In this guide, we’re walking through the basics of cash accounting: what it is, benefits and drawbacks, how it compares to accrual accounting, and the main categories in cash accounting.