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The Difference Between Cash-basis and Accrual Basis of Accounting

GritForce Bookkeeping Cash basis accrual basis

An essential decision you will make for your organization/business is selecting the most suitable accounting method for your business because this will eventually direct everything from tax filings to financial reporting.

The go-to bookkeeping method for most small businesses in their early stages is cash-basis accounting, while larger businesses use the accrual basis.

Nonetheless, the motive for selecting a given accounting choice varies based on the business needs and size. Picking the right accounting method calls for some consideration, especially because the IRS expects you to choose one system and stick with it.

Cash Basis Accounting