Cash vs. Accrual Accounting: Which Is Right for You?

Choosing between cash and accrual accounting is one of the first big decisions a business makes, and it affects everything from your tax bill to how clearly you can see profitability. This article breaks down the trade-offs in plain language.

How to choose your method

Cash accounting records income and expenses when money changes hands, while accrual records them when they are earned or incurred. Accrual gives a truer picture of profitability but takes more discipline.

Our recommendation

Most product and inventory businesses benefit from accrual, while very small service businesses can start with cash. We can help you pick and switch when the time is right.