Accrual accounting explained by small business accountants in Sydney
When it comes to accounting, it has a lot of jargon involved and if you haven’t studied accounting or learnt the basics it can get pretty messy and quite confusing. Our small business accountants in Sydney are going to try simplify what accrual accounting is.
So what is accrual accounting? It is an accounting method at records revenues and expenses when they are incurred, regardless of when cash is exchanged. The term accrual refers to any individual entry recorded that is in regards to revenue or expense in the absence of a cash transaction.
The need for this method rose due to the increasing complexity or business transactions and a desire for more accurate financial information. For example the use of credit projects streams of revenue over a long period of time yet it affects the company’s financial condition at the point of the transaction.
So making these transactions appear on the same reporting period at the actual time that the transactions can be a difficult task to ensure that you company doesn’t have a bad financial condition, our business account in Sydney are always ready to give advice on these tricky situations.
Feel free to contact our small business accountants in Sydney for some help in order to help you run your business smoothly and without any financial problems.