Cash basis accounting does not accurately represent your financial position when there are pending payments. You owe the employee money, but cash basis accounting only recognizes an expense when money is paid out. I strongly recommend accrual basis accounting if you have either employees or inventory.
Retained earnings is the net of all inflows and outflows since inception of the business that have not been transferred to some other equity account. It really is not typical for a sole trader to use a retained earnings account. Corporations use them until dividends are paid out to distribute earnings. See this Guide:
Drawings have already been withdrawn from the company by the capital account owner. Retained earnings are awaiting distribution. Both are unnecessary for sole traders. They can be used, but add complexity.