Accrual based accounting revenue recognition is a way of keeping track of when a company has earned income. It involves recognizing revenue when it has actually been earned, and not necessarily when it has been paid for. This means that even if a customer hasn’t yet made payment for a product or service, the company can still recognize the revenue as having been earned. In other words, it allows businesses to recognize revenue earlier than they would have done without accrual based accounting. This helps companies more accurately represent their true financial position in their reports.