We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

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

2»

Comments

  • Jeremy535897
    Jeremy535897 Posts: 10,751 Forumite
    10,000 Posts Fifth Anniversary Photogenic Name Dropper
    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.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245K Work, Benefits & Business
  • 600.6K Mortgages, Homes & Bills
  • 177.4K Life & Family
  • 258.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.