The cash accounting method has always been the simplest and most straightforward way to keep track of money coming in and out of a business. It involves recording transactions when they happen, typically when cash changes hands. In contrast, accrual accounting records revenue and expenses when they are earned or incurred rather than when the actual payment is made or received. This means that although cash may not have physically changed hands yet, you record the transaction as if it had. The advantage of using the accrual method is that by recognizing transactions immediately, you gain a better picture of your financial position at any given time.