Accounting Basis Cash vs Accrual are two of the most commonly used accounting methods in business. The cash basis of accounting is simpler, and only records transactions when funds are exchanged. So, it focuses more on inflows and outflows of actual money. On the other hand, accrual basis of accounting is more complicated and requires recording economic activity even if no money is exchanged, such as when a company provides a product or service and promises to pay later. This method takes into account incoming and outgoing items that may not have settled yet. In short: cash-basis accounting looks at what flows through your bank account while accrual-basis looks at what flows through your books.