SUBJECT – Cash versus accruals
Hi I'm Jeff Banks, Business Advisor with over 30 years experience at MWL Financial Group specialising in small business.
When it comes to accounting for taxes and BAS etc there are two acceptable methods, cash or accruals.
Cash means you account for income and expenditure as it goes through your bank account. Accruals means you account for income and expenditure as you either invoice or incur it.
The use of either or cash or accruals for the small business person is optional and being able to opt into using either and can use one for presenting your tax returns and another for lodgement of BAS.
The concept of 2 sets of books is real. Preparing your financial statements on an accruals basis is a generally accepted accounting principle but accounting and reporting for tax can be legitimately be on a cash basis with a simple tweak of the income tax return.
For more information contact us at firstname.lastname@example.org and either me, Jeff Banks or one of our experts will be more than happy to help.