Accrual accounting principles are an effective way for businesses to track their finances. These principles require businesses to record revenues and expenses when they happen, rather than when cash changes hands. This process creates an accurate picture of the company’s financial situation at any given time, allowing for better planning and decision-making in the future. With accrual accounting, a company can easily track its assets, liabilities, equity, and net income from year to year. The resulting numbers are more reliable and useful than non-accrual based systems. When used correctly, accrual accounting can be a powerful tool for any business!