Cash vs accrual accounting — which is right for my café?

The key point for you is that cash basis accounting isn't actually an option for a limited company — it's only available to sole traders and partnerships, so as a limited company you must use traditional (accrual) accounting to work out your taxable profits. The difference is about timing: cash basis records income and expenses when the money moves, while accrual accounting records them when they're earned or incurred, regardless of when payment happens — so your wholesaler invoices count when you receive them, not when you pay. Because of that, the method can shift profit between tax years, which is why HMRC sets the rules. The good news is that for a café taking mostly card payments on the day, accrual accounting isn't much extra work — your accounting software will handle the receivables and payables automatically. Keep it simple and let the software do the heavy lifting.