Self assessment moving to default cash basis - should I elect to remain on accrual basis?

Jeremy535897

MyRealNameToo said:

Jeremy535897 said:

The traditional (accruals) basis of accounting will generally be better if you buy capital assets, but don't need to write them off in year one, or if people pay your bills more quickly than you pay suppliers

speeds of payment seem an odd thing to bring up on accrual accounting? Normal GAAP standards revenue is recognised when its earned not paid likewise expenses are accrued when incurred not when you finally get round to paying the supplier. Speed of payment is important in cash accounting because thats all about when the money hits the account and leaves the account. 

If your customers pay immediately, and you have a month's credit from suppliers, the cash basis will include all of your sales and not all your purchases. That is a disadvantage.