Bookkeeping
Cash basis bookkeeping
Simple cash-basis books for smaller EU businesses and sole traders, recording income and expenses when money actually moves, a good fit until local GAAP, a lender or growth past an SME threshold calls for full accrual reporting.
Bank reconciliation summary
Illustrative client · August 2026
EUR
| Account | Difference | Status | ||
|---|---|---|---|---|
| Operating account··4821 | 184,220.16 | 184,220.16 | 0.00 | Reconciled |
| Reserve account··0937 | 60,000.00 | 60,000.00 | 0.00 | Reconciled |
| Company card··1006 | (12,418.52) | (12,418.52) | 0.00 | Reconciled |
| Card processor clearing | 8,905.40 | 8,905.40 | 0.00 | Reconciled |
| Payroll clearing | 0.00 | 0.00 | 0.00 | Reconciled |
Last weekly runFri, 28 Aug, every account agreed to its statement.
Two open itemsTwo card receipts requested from you, marked on the card account until they arrive.
Illustrative. An example of the document, not a client's figures.
When cash basis fits an EU business
Micro and small enterprises across the EU sometimes run simplified cash accounting before local GAAP or a growing lender relationship requires the full accrual picture. Under the EU SME VAT scheme that took effect on 1 January 2025, a qualifying small enterprise can also stay outside VAT registration up to a national threshold, which several member states set as high as EUR 85,000, or up to EUR 100,000 for cross-border sales across the EU. Businesses under those thresholds often keep books just as simply.
Finbryn records income when it is received and expenses when they are paid, reconciles bank and card accounts each month, and produces a cash-basis profit and loss and balance sheet that a lender or your local accountant can read quickly.
The limits of cash basis in the EU
Most member states expect accrual-based local GAAP or IFRS for SMEs once a business incorporates formally, takes on a bank facility, or crosses a size threshold set by that state. We flag during onboarding whether your entity type and country of registration still permit cash basis, and we convert existing cash-basis records to accrual when your registered local partner tells us it is time.
Getting the switch right
Moving from cash to accrual mid-year, rather than at a clean period boundary, is the most common way small businesses lose comparability in their own reports. We plan the timing of any switch with you and your registered local partner so the transition lands at a sensible point in the financial year.
Questions
Frequently asked questions: Cash basis bookkeeping
Is cash basis allowed for every EU entity?
It depends on the member state and entity type. We check your registration and flag it if local GAAP requires accrual instead.
Does staying under the SME VAT threshold mean we skip bookkeeping too?
No. Staying below the EUR 85,000 domestic or EUR 100,000 cross-border SME VAT threshold affects VAT registration, not whether the business still needs accurate books.
Can you convert our cash-basis history to accrual later?
Yes, and we do it in coordination with your registered local partner once accrual reporting becomes the requirement.
Does cash basis still require us to track outstanding invoices and bills?
We still record them for reference so nothing is lost, but they do not hit the profit and loss until cash actually moves, which is the core difference from accrual reporting on the same set of transactions.
Can we switch from cash to accrual basis partway through a year?
Yes, though it means restating the year to date on the new basis, which we scope separately since it involves rebuilding prepayments, accruals and unbilled revenue that cash basis had not been tracking up to that point.
Is cash basis allowed for my business?
Most small businesses can choose cash basis. Certain entities with inventory or above a revenue threshold may need to use accrual instead; we flag that during onboarding.
Can I switch to accrual later?
Yes. We convert existing cash-basis books to accrual when a lender, investor or your own growth calls for it.
How is cash basis bookkeeping priced?
Pricing for cash basis bookkeeping depends on your transaction volume, the software you use, and how much cleanup is needed before ongoing work starts. Current ranges are published on the pricing page, and your exact fee is confirmed in writing before anything begins.
What software works with cash basis bookkeeping?
Cash basis bookkeeping runs inside QuickBooks Online or Xero, whichever you already use. If you are not yet set up in either, we can configure a file in your name so you keep ownership of it once the engagement is under way.
Related services
- BookkeepingMonthly bookkeepingOngoing monthly bookkeeping: transactions sorted into categories, accounts reconciled and month-end reports delivered in the software you already use.
- BookkeepingAccrual basis bookkeepingBooks kept on an accrual basis, matching income and expenses to the period they were earned or incurred, so reports reflect the real state of the business.
Industries
Next step
Talk to the team that would run your books
A short call covers your setup, your software and what a first month would look like. You get a written scope and price after it.