Cash or Accrual: Choosing the Right Accounting Method for Investors

How you recognize income can reshape how your performance looks — and how others judge it.

Cash Basis: Income and expenses are recorded when money moves. Simple and aligned with tax filings, but doesn’t show the full picture. Accrual Basis: Records income when earned and expenses when incurred. It provides a more accurate view of operations — preferred by lenders and partners.

When to Use Each

• Cash basis: Small portfolios or single-property owners.

• Accrual basis: Syndicators, funds, and partnerships.

Key Insight: Cash shows liquidity; accrual shows performance. Use both to make smarter decisions.

⚠️ This blog is for informational purposes only. It may not apply to your specific situation. Please consult your CPA.