How does accrual basis accounting differ from cash basis accounting? The difference is when, where, and how the expenses are recorded. Although there are several advantages between the two methods, small businesses owners tend to choose the cash basis accounting method. With the cash method example, you record the payment from the customer once the payment has been received in hand. In addition, when you make purchases, let’s say by check you record the transaction once the funds have been debited from your bank account. We use the cash method all the time without realizing there is a method to the madness. A good example is my checking account, when I make a bill payment electronically I do not account for the funds leaving until
