Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Search Products
Filter by Categories
Company Secretarial
General Business
General Interest
Investing in Property
Personal Growth
Personal Wealth
Trusts and Estate Planning

Cash versus Accrual basis

Normally, vendors account for VAT on the accrual basis. That is, the VAT falls to account on the date of the relevant invoice. If the vendor has uncollected debtor balances at any time, then the debtors book contains VAT that has often already been paid over to SARS by the vendor, but not yet collected from the debtor. The converse is true in respect of the vendor’s unpaid creditors, but since debtors balances almost invariably exceed creditors balances, the VAT tied up can cause severe cash flow difficulties.

Sole traders, partnerships and other unincorporated businesses whose members are natural persons and whose annual turnover is less than R2,5m may elect to account for VAT on the cash basis. Under this arrangement VAT is only accounted for when the cash corresponding to a transaction flows into or out of the business. Thus no VAT is tied up in debtors or creditors.

Should you wish to make an appointment, please feel free to visit Derek’s diary and book a time that suits you.


Need a shelf company or CC, a tax clearance, VAT registration or B-BBEE certificate? We offer a wide range of such services.


  1. Fanie Mouton

    Good day.

    I have a client who sole his company and there is a despute whether or not they could use Cash Basis. Please contact me if you have a consultation fee I can arrange with the client that they will pay this fee.

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Looking for even more informative content? Check out the books I have written which have proved to be very popular.

Need help with your Trust or Business?

Contact us today or set up a free meeting with our CEO, Derek Springett. We have been offering expert advice and business services since 1971. You can also view see our full list of services.

Do you want to leave your cart?

Your cart is awaiting your next purchase, so please proceed to the Home page and continue shopping. If you are leaving your cart because of problems, why not give us a call on our 24 hr numbers 063 866 8928 or 011 805 0030 (subject to load shedding)? If all else fails, call Derek, our CEO on 082 552 9696. We’ll do what we can to help