What is accrual accounting?
Recording income and costs when they are earned or incurred, not when the money moves.
Also called traditional accounting. A sale counts on the day you invoice it; a cost counts on the day you incur it, even if you pay next month.
It gives a truer picture of how a period actually performed, which is why larger businesses use it. The trade-off for a small business is being taxed on income you have not yet been paid.