2016-11-21 00:00:00 Time Tracking English Learn the difference between cash basis and accrual accounting, and discover why the accrual method may be more accurate for your small... https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/03/08214825/Two-corporate-employees-tracking-finances-on-computer-in-cubicle-office-space.jpg Track Finances on an Accrual Schedule for Accuracy

Track Finances on an Accrual Schedule for Accuracy

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Accrual accounting and cash basis accounting are two methods for recording income and expenses, differing mainly in the timing of when those items are recorded. With the cash method, revenues are recorded when they are received and expenses are recorded when they are paid. The accrual method, on the other hand, records revenues when they are earned and expenses when they are consumed.

Small businesses often use cash basis accounting, but the timing issues can sometimes result in wider swings in reported results. As such, the accrual method may provide a more accurate picture of the stability of inflows and outflows of the business. Also, company financials can only be properly audited if the method used is accrual.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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