By Brian Ravencraft
When it comes to keeping track of the revenue coming into your agribusiness, and the expenses you take on during day-to-day operations, you essentially have two different types of accounting methods to choose from. Cash accounting and accrual accounting. It is important to understand the difference between the two before deciding what is best for your agribusiness.
Cash accounting looks at the revenue and expenses as they come in and as they are paid out. Think of this as a wheel that is constantly turning as money flows into your operation. Not considered while using this method is money that is expected to come in. Here we are talking about all real cash, all the time. Those who enjoy a real time look of the cash coming in and out of their business should select this method.
Accrual accounting brings accounts payables and receivables into the fold, monitoring the money brought into the agribusiness and the funds and services the operation owes to outside vendors and companies.… Continue readingRead More »