| Businesses or individuals adapting to financial | | | | corporations accrual method is most preferred. |
| record keeping need to follow some of the basic | | | | Small business owners can manipulate their |
| rules or principles of accounting as in any other | | | | revenues from the eyes of tax authorities by |
| activity. It better not to go ahead with accounting | | | | recording the cash received to the next financial |
| without following the basics or the Generally | | | | year to evade tax. But large corporations cannot |
| Accepted Accounting Principles(GAAP), that may | | | | do this because of large amount of cash |
| rather end in messing up with finances. Apart | | | | transactions and the other factor is the fear of |
| from this by adhering to proper accounting guide | | | | loosing their reputation with stakeholders if |
| lines makes both the internal and external | | | | tracked by the government agencies. |
| customers confident about an organization. | | | | Whatever accounting principle is followed it is |
| Most accounts of businesses are based on two | | | | mandatory nowadays to have an accounting |
| methods of accounting the cash basis and accrual | | | | information system in place. Small business people |
| basis. In cash basis accounting the transactions are | | | | will find difficulty in investing for this kind of a |
| recorded based only on the transfer of cash, like | | | | setup. To get more functionality and accuracy as |
| when the cash is received it is recorded instantly, | | | | expected with information system, but always |
| expenses are recorded only when the real | | | | with a higher price tag. |
| payment happens. In the accrual method whether | | | | Numia.biz a simple online service that is aimed at |
| the cash is paid or not the transaction is recorded | | | | small business accounting with the flexibility of |
| and the credit owed to the company and credit | | | | using both the cash and accrual basis of |
| owed by the company is recorded. | | | | accounting. Even though it is aimed at small |
| Almost most of the small business people follow | | | | business accounting it can be used by even larger |
| the cash method as the number of transaction will | | | | companies due to fact that it supports accrual |
| be less as the information of payments can be | | | | basis accounting. |
| noted down easily. But in case of large | | | | |