Accounting
Cash Basis Accounting
An accounting method that records revenue when cash arrives and expenses when cash leaves.
Cash basis is the simplest accounting method. It matches what's actually in the bank account closely — but distorts month-to-month profitability when receivables, payables, or inventory are meaningful.
Most small businesses start on cash basis for simplicity. Switching to accrual happens via Form 3115 with a §481(a) adjustment.
Related service
Visit relevant serviceRelated terms
Have a Cash Basis Accounting situation in your business?
We'll show you how this applies to your specific facts — and scope a plan if you want us to handle it. Fixed monthly fee, tailored to your needs.
Talk to a partner