Cash accounting records transactions when money changes hands, receipt of payments or disbursement, while accrual accounting recognizes income and expenses when they are earned or incurred, regardless of when payment is made. 

Cash accounting is generally easier to understand and implement and provides a clear picture of a company’s cash situation. Accrual accounting can be more challenging to implement, as it requires  tracking of accounts receivable and accounts payable as well as the tracking of stock inventories. However, accrual accounting  provides a more accurate and complete picture of a company’s financial position and allows for better financial forecasting and planning.

Ranch Vision uses accrual accounting methods throughout all projections.