Kasboekhouding

The cash basis of accounting records income and expenses only when money is received or paid.
It does not recognize revenue or expenses when earned or incurred, only when cash changes hands.
For example, if a landscaping company completes a job in April but receives payment in May, the income is recorded in May. 
The same principle applies to recording expenses on a cash basis. 
If the business buys ten lawn mowers on credit in March but makes the payment in April, the expense is recorded in April when the money leaves the account.
This method is popular among small businesses, sole proprietors, and service providers because it is simple and requires minimal accounting knowledge.
One key benefit of the cash basis is its clarity in tracking cash flow, which makes it useful for day-to-day operations and short-term decisions.
However, this method has limitations. Since income and expenses are not matched to the period in which they occur, profits may appear uneven, especially in seasonal businesses.
It may also fail to show long-term financial performance, making it less suitable for larger companies or investors seeking detailed financial insight.