Accounting Accruals is a principle that provides an accurate representation of a company’s current financial position. It states that companies must record certain transactions before they occur, but are not obligated to pay for them until later on. This means companies can have money owed to them (receivables) and money they owe (payables) on their books even if those monies have not yet been paid or received. In other words, accrual accounting helps businesses to keep an objective and accurate track of their profits and losses just like keeping good records that allow you to save money and make sure your business runs smoothly.