Cash vs Accrual: When Growing Companies Need GAAP

Описание: Cash accounting shows what’s in the bank. That works early, when transactions are simple, and the main concern is liquidity.

As companies grow, revenue becomes recurring, hiring accelerates, and financials start driving real decisions. Accrual accounting changes how revenue and expenses are recognized and gives a clearer view of performance. It introduces deferred revenue, prepaid expenses, and proper expense matching. But accrual alone does not mean GAAP-compliant.

00:00 – Introduction
03:39 – The Difference Between Cash and Accrual Accounting
07:11 – When Cash Accounting Still Works (Sole Proprietors and Simple Businesses)
07:40 – Pros and Cons of Accrual Accounting
10:55 – How Accrual Changes Revenue Recognition
13:09 – Top 3 ASC Guidelines AI Companies Should Know for US GAAP Compliance
17:11 – The Biggest GAAP Challenge for SaaS and AI Companies: Revenue Recognition
24:00 – US GAAP Resources for Founders (Guidance + Compliance Checklist)
25:15 – Why Inaccurate Reporting Breaks SaaS Metrics and Decision-Making
28:12 – Why Accrual Alone Is Not Enough and When US GAAP Becomes Critical
32:14 – Final Takeaways and Closing Thoughts

Cash stops working once growth adds complexity. Accrual fixes performance visibility, but without GAAP discipline, gaps still surface. Confusion between bookings, invoices, cash received, and recognized revenue is one of the most common issues during fundraising, audits, lending, and M&A.

SaaS and AI-specific GAAP topics like revenue recognition, software cost capitalization, and diligence questions from investors come up repeatedly.

If your company is growing toward fundraising, an exit, institutional lending, or audits, this helps clarify whether your financials support those goals.

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