The same month can look very different depending on the basis your bookkeeper uses.

• On the cash basis, a full-year insurance premium paid in July is all a July expense. On the accrual basis, one-twelfth of it is an expense each month.
• On the cash basis, a CCS payment for June’s care that arrives in July is July income. On the accrual basis, it is June income, because that is when the care was provided.
• Loan payments include principal. On the cash basis, the whole payment looks like a cost. On the accrual basis, only the interest is an expense; the principal reduces the loan balance.

Accrual books are more useful for decisions because they match each month’s income with that month’s costs. They are also the only way to get aging reports. If your bookkeeper keeps cash-basis books, ask whether you can receive accrual-basis reports, or at least a monthly list of unpaid tuition and unpaid bills.