As well as it’s availability to use for your business there is also the matter of suitability for your business – just because you can use it that doesn’t mean that you should. Although it is a much easier system to use there are some downsides. Financial Position The main downside is that cash basis […]
Cash Basis Eligibility
As already mentioned in the previous post cash basis accounting is not available to everyone. Sole traders can use the scheme. Partnerships can use it as long as they are not limited liability. Limited companies cannot use the scheme and there is list of specific kinds of business excluded too – the list is available […]
Cash Basis vs Accruals Basis
Cash basis was introduced to make it easier for the self employed to manage their accounts and work out their income and expenses for the year. Cash basis does not mean that you only deal in cash – it is about when transactions are recognised and recorded. This post explains how cash basis differs from […]