The accounting basis that brings items to account as they are earned or incurred (and not as cash is received or paid) and includes them in financial statements in the related accounting period. Accrual-based accounting can provide improved visibility into a company’s cash flow and financing requirements. For example, companies that “draw down” from purchase orders as services are used can use accrual-based accounting to help understand how that usage is impacting the company’s finances overall.

Source: Staffing Industry Analysts

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