There are two types of accounting methods for businesses: cash and accrual. The cash method simply means that when you receive payment for a good or service, that is when it is counted as income. Likewise, when you make a payment for a good or service, that is when it is counted as an expense. The accrual method is a bit different in that it's not *when* you make or receive payment that you count it as income or expense, but rather when the good or service is delivered. For example, a customer may pay you up front or well after they received your good or service, but it's when they received it that you record it as income. This has tax implications in that your recorded income and expenses may fall in a different tax year than when financial transactions were actually made. This is more common for larger businesses. Accrual can definitely be a benefit for businesses that may be doing consistent work but getting paid at irregular intervals, as it allows them to accurately represent income and expenses when the value of their work is delivered.