Do you know about Cash Accounting?

Do you know about cash accounting❔

You have a choice when it comes to how you record your business transactions; you can use the cash basis or the traditional/accruals basis.

Cash accounting is simpler because you use the date money comes in or goes out of your business as when it occurred. This is great for people operating small businesses or maintaining their own books, but is also great for cashflow.

This is because you will only have tax to pay on income you have physically been paid for, which can be a game changer for small business.

Cash accounting has become the default method of accounting for sole traders and partnerships from the 2024/25 tax year. If you can't or don't want to use it, you now have to remember to 'opt out' in your self-assessment tax return.