Cash method

The cash method (kontantmetoden) is a simplified bookkeeping method where customer and supplier invoices are recorded only when they are paid, rather than when they are sent or received. The method may be used by businesses with a net turnover that normally amounts to no more than SEK 3 million.

The advantage is that bookkeeping becomes simpler: fewer entries and no ongoing handling of receivables and liabilities. The disadvantage is that the books do not show unpaid invoices, which makes it harder to keep track of liquidity. At the end of the financial year, all unpaid invoices must still be recorded.

VAT is then accounted for using the year-end method (bokslutsmetoden), that is, on payment. The alternative is the invoicing method (faktureringsmetoden). If you want to switch your VAT accounting from the invoicing method to the year-end method, you must apply to the Swedish Tax Agency (Skatteverket), and this is only granted if there are special reasons.