Benefits of the Accrual Method in Recording Financial Transactions

[Suba]

The accrual basis is a method of recording financial transactions (in accounting) that refers to recording financial transactions when they occur, rather than when cash is received or disbursed. Some examples of accruals include sales made on credit, purchases of raw materials on credit, rent payable, etc.

Implementing the accrual method is very beneficial for presenting financial statements, such as:
Providing more accurate financial information
Easier to adjust revenues and expenses
Easier for investors to make decisions.

Have you implemented the accrual system in your business's financial records?

 

[neku]

Online, many internet companies are not paying online investors, workers as and when promised, they have a lot of bad debt which they write off, so they do not use accrual method.

 

[Augusta]

Real-time view of finances.
Accurate assessment of finances.Good management of debt and income.

 

[kit_hung]

I haven't fully implemented the accrual system yet. I've been mixing it up with cash basis due to lack of understanding and time. But I know it's very important especially for a growing business. I'll need the help of an accountant or a short course to get it right. It's not easy but it's totally possible if I plan it myself.