Cash-basis accounting is an accounting method that only records transactions when the cash flows in or out. This means that income and expenses are only officially recorded when there is an actual exchange of cash, as opposed to accrual accounting, which also accounts for transactions that are invoiced but have yet to be paid. Cash-basis accounting is typically used by small businesses and organizations because it’s much easier to manage and implement, since it doesn’t involve tracking outstanding debts and credit balances. Plus, tax reporting under the cash-basis method is simpler, since income and expenses can usually be matched as they occurred throughout the year. This makes taxes easier to file at the end of the year!