The difference between accrual and cash basis accounting is the recording time for revenue and expenses. Larger businesses use the accrual method, which records all transactions as soon as they happen, whether money has changed hands or not. This method helps a company see the long-term profits of their business, but it doesn't give an accurate statement as to the day-to-day cash flow. Cash basis accounting only records money as it's received or paid out. This aids personal finance or smaller businesses to track the exact amount they have going in or out at any given time. Cash basis accounting doesn't show the long-term profits since it's focused on the physical exchange of money as opposed to future promised earnings.