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cash on hand. Definition. Funds that are immediately available to a business, and can be spent as needed, as opposed to assets that must be sold to generate cash. The amount of cash on hand determines what projects a company can undertake, or what financial hardships can be absorbed, without going into debt or arranging other financing.
Here's how each works: The cash method. The cash method is the more commonly used method of accounting in small business. Under the cash method, income is not counted until cash (or a check) is actually received, and expenses are not counted until they are actually paid. The accrual method.