No items found.
FREE WEBINAR: The 7 Deadly Sins of Subcontractor Billing
Register Now →
By clicking “Accept All Cookies," you agree to let Siteline store cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.
Construction glossary

What is Cash Accounting?

Cash accounting is a financial accounting method often used within the construction industry. It is characterized by recognizing revenue and expenses only when cash is received or paid out. This means that transactions are only recorded when the business physically sees the money. For instance, if a construction company performs a job in June but doesn't receive payment until July, the income will be registered in July's financial statements, not in June's. This method works well for smaller construction businesses as it allows them to track cash flow accurately and in real-time. Furthermore, cash accounting in construction provides a straightforward representation of how much actual cash the business has at any given moment, allowing for better financial management and planning.