Accrual vs Cash

Akaunting performs accounting on an accrual basis. Let’s see what it means and why it’s been chosen:

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 paid or not.

Cash accounting

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

In short, accrual basis accounting gives the most accurate picture of the financial status of your business. You can use the Cash option in reports for cash basis accounting, giving you a complete picture of the money moving in and out of your business.

Updated on: 23/03/2025