Accrual and cash accounting are two distinct methods of bookkeeping that businesses use to track their finances. Accrual accounting records and reports all transactions that take place within a specified period, regardless of when money is received or paid. Cash accounting, on the other hand, only records transactions when payment is received or made. This method of bookkeeping allows companies to more accurately assess their financial health at any given moment in time. It also provides an up-to-date look into how much money is actually coming in, as opposed to estimated income. In the end, accrual and cash accounting can both be useful tools if used correctly – and they help businesses make sure they always have an accurate picture of their current financial standing.