Accrual vs Cash

Akaunting performs accounting on an accrual basis. Let's see what does it mean and why it's been choosen:

Accrual accounting

Incomes are reported in the fiscal period they're earned, regardless of when they're received, and expenses are deducted in the fiscal period they're incurred, whether they are paid or not.

Cash accounting

Incomes are recorded when cash is actually received and expenses are recorded when they are actually paid (no matter when they were actually invoiced).

In short, accrual basis accounting gives the most accurate picture of the financial status of your business. You can use the Paid button in reports for cash basis accounting and it will give you a complete picture of the money moving in and out of your business.

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