käteiskirjanpito

Käteiskirjanpito, also known as cash accounting, is a method of recording and reporting financial transactions that is based on the actual receipt and payment of cash. Unlike accrual accounting, which recognizes revenues and expenses when they are earned or incurred, regardless of when cash is received or paid, cash accounting records transactions only when cash changes hands. This method is commonly used by small businesses, sole proprietors, and individuals who prefer simplicity and transparency in their financial management.

In käteiskirjanpito, the focus is on the actual cash flow of the business. This includes recording all cash inflows, such as sales and receipts, and all cash outflows, such as expenses and payments. The primary financial statements generated through cash accounting are the cash flow statement and the balance sheet. The income statement, which is a key component of accrual accounting, is not typically used in cash accounting.

One of the main advantages of käteiskirjanpito is its simplicity. It requires less detailed record-keeping and can be managed with basic accounting software or even spreadsheets. This makes it accessible for small businesses and individuals who may not have the resources for more complex accounting systems. Additionally, cash accounting provides a clear picture of the business's liquidity, as it directly reflects the actual cash available for operations.

However, cash accounting has its limitations. It does not provide a comprehensive view of the business's financial health, as it does not account for accrued revenues and expenses. This can lead to a distorted picture of profitability and may not be suitable for businesses that operate on credit or have significant deferred revenues and expenses. For these reasons, many larger businesses and those required by law to file financial statements with regulatory bodies use accrual accounting instead.