Accrual method is the most accurate method and a good one to use for analyzing the business performance. Cash basis for taxes usually delays tax liability which is helpful. If you keep inventory you are not usually allowed to use cash method for tax purposes. Where state law allows I would want to file sales tax on the cash basis because you do not want to pay sales tax you have not yet collected. In order to keep all this straight I make custom reports: Balance Sheet - Tax, Profit & Loss Tax, Sales Tax reports (in cash basis) so that I can quickly run the right report with the right settings, but I do keep the books set to accrual for all other reports.
If you are a fast growing business this will allow you to delay taxes legally and use that money as seed money when a business needs it the most.
