Balance Sheet Cash Basis is a method of accounting for financial records that documents all cash transactions that occur within an organization. This system requires that businesses record all income and expenses as they are received or incurred. That means that income and expenses don’t necessarily need to have been exchanged for cash in order to be recorded – just when the exchange of goods or services between two parties has taken place. By using the Balance Sheet Cash Basis, businesses can accurately and quickly track their financial performance over time and make better decisions about future investments and operational costs.