Cash and accruals accounting

Cash accounting systems are the most common in emergencies and include the survival system and the cash and bank book.  Cash accounting systems record money coming in (receipts) and money going out (payments).

An accruals accounting system gives improved financial management. It will help you predict and therefore deal with potential problems which are missed by just using a cash accounting system. In an accruals system, adjustments (or accruals) are made to the accounts to show payments or receipts due but not yet made. Accruals are also made for payments or receipts made in advance.

Although it is unlikely that an accruals accounting system will be used in the early stages of an emergency, it is worth realising that, for example:

A cash accounting system will not fully reflect these two amounts; an accruals system will.

The more technical accruals accounting system needs fully trained accounting and bookkeeping staff to operate it. A full description of this system is outside the scope of this guide.