Accrual accounting is the practice of recording financial transactions when they occur, rather than when money changes hands. This method allows for the recognition and tracking of revenues and expenses without waiting until payment is received or made. Accrual-basis accounting gives businesses a more accurate picture of their financial situation by accounting for all transactions at their current values. It can also provide insights into how a company is performing over time and enable it to plan its capital budget more effectively. With accrual accounting, business owners have the information they need to make sound decisions that will help ensure the long-term success of their enterprise.