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Accounting
Cash Basis Accounting
A simple method where you record revenue only when cash is received and expenses only when cash is paid.
Cash basis is super easy for tiny businesses and individuals because you don't need to track complicated timing. But it can make your books look weird if you get paid late or pay bills early. Most big companies can't use it because GAAP and the IRS usually require accrual accounting.It's like only counting the money in your pocket when you actually get paid or spend it — no IOUs or promises count until the cash moves.
Real world: A small YouTube creator records income the day the AdSense payment hits their bank and records a new microphone as an expense the day they swipe the card.
💡 Cash basis is perfect for side hustles or very small businesses — it's simple and matches what your bank account actually shows, but switch to accrual when you grow.