Accruals accounting is the process of recording and maintaining a company’s financial transactions as they happen. It ensures that all expenses, income and other financial obligations are accounted for at the correct time, and allows managers to plan ahead according to their current financial status. With an accrual accounting system, companies can accurately budget for future expenditures and maintain tight control over cash flow. This helps them ensure accuracy when reporting to investors, creditors, and regulators. By keeping accurate records and regularly updating their financials, businesses can better prepare for unexpected events and make informed decisions.