Cash accounting records income and expenses when money is received or paid. It differs from accrual accounting, which assigns revenue and expenses to their economic periods.[1] The term describes accounting timing and is not automatically equivalent to a VAT cash-accounting scheme.
A customer invoice paid late appears in a different period than under accrual accounting. A cash view helps manage payments but can distort comparisons between periods. Review outstanding receivables and obligations separately when assessing the business's financial position.
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Compiled with AI assistance using public sources. General explanation, not individual legal or tax advice. Describing a concept does not mean Zoloo offers it as a feature.