Cash Accounting
Recording revenue and expense only when cash moves.
Definition
Cash Accounting is Recording revenue and expense only when cash moves. Teams usually run into it when the team has to decide whether timing is driven by operational activity or by actual cash movement.
What makes it useful is that that choice changes how revenue and expense appear in a period, even when the business itself has not changed. You usually see this term when comparing management reports, tax treatment, or close procedures.
Use cases
Use Cash Accounting to explain why the same property can look different under two accounting views.
Review Cash Accounting when the team needs to line up reporting expectations before month-end closes begin.
Track Cash Accounting so operations can keep managers clear on whether a result reflects operations or just cash timing.