What is Cash accounting?
Finance & accounting. A plain-English definition for Australian business owners.
Cash accounting recognises revenue when received and expenses when paid.
It's simpler than accrual accounting and is permitted for smaller businesses (under the small business turnover threshold). It can distort the view of period performance because timing differences (e.g., a large invoice issued in June and paid in August) move income between periods. Most growing SMEs migrate to accrual accounting as the business scales.
In a connected back office this sits with the Finance hub, where Valont runs bookkeeping, managed payroll and bas & tax compliance for Australian SMEs as one team. The full definition set is on the glossary.
Talk to an Advisor
General information, not advice. For how this applies to your business, talk it through with a Trusted Advisor or start with the Business Health Check.