Most businesses are free to choose between the accrual and cash methods of accounting for their first tax return. If you've chosen cash and now you need to switch, you'll need Internal Revenue Service approval. To determine if you have to change, add the gross receipts for the most recent tax year to the previous two years and divide by three: As of 2012, if the average exceeds $5 million, you have to switch to accrual. You must also change if your business carries an inventory and your gross receipts are more than $1 million.