What's the difference between cash and accruals (non-cash) accounting?

These are accounting terms which refer to the manner in which you record and report your business finances, particularly to the ATO. If you are registered as a cash accounting business then you are only required to report your sales and purchases in the period you actually receive or spend the money. If you are registered with the ATO on an accruals basis then your sales are reported on the date of your invoice, not the date you actually receive the money.

The same applies to purchases - you report your purchases on the date of the supplier invoice not the date you pay them. These methods are critical to correctly calculating your GST liability or refund. For further information visit the ATO website.

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