Cash Basis vs. Accrual Basis: What’s the Difference?
CFO Simplified
SEPTEMBER 11, 2022
There are two different ways of performing accounting functions in your business: One is on a cash basis, and the other is on an accrual basis. More often than not, your tax accountant is doing your taxes on a cash basis. Why? They don’t want you to pay taxes on money that you haven’t received yet. However, running your operating financials on a cash basis is the WORST way to prepare your financials.
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