The difference between cash and accruals based accounting is: When are you counting the income or expense for tax purposes (and VAT purposes, if you’re VAT-registered)? Which year or quarter?
If you have a pile of receipts or a bank statement, and you don’t know where to start putting them together or why you should, then this is the post for you.
Strategically thinking about your business starts with thinking about what you’re working towards and why. First build your picture of success, then define goals around it, and then make plans to get yourself there.
After you get it set up, the main considerations are the number of transactions each month (in and out); how frequently you do your bookkeeping; how much you’re able to automate; and how many extra steps you have to go through, if any, for the reporting and analysis you want.
The main things you want to focus on are get paid as quickly as possible, ensure you don’t overlook invoices you need to pay, and making sure you have all your receipts and back up.