Many founders run their businesses using cash-based thinking without realizing how much clarity accrual accounting can provide. Accrual accounting records income and expenses when they are earned or incurred—not when cash changes hands.
For service-based businesses, this distinction is critical. Projects often span weeks or months, invoices are paid later, and expenses don’t always align neatly with revenue. Cash-based reports can distort reality, making profitable months look unprofitable and vice versa.
Accrual accounting provides a more accurate picture of business performance by matching revenue with the expenses required to generate it. This allows founders to understand true profitability, forecast cash flow more accurately, and make better strategic decisions.
The challenge is that accrual accounting requires discipline, consistency, and proper systems. Automation combined with senior accountant review ensures accruals are handled correctly without burdening founders with manual work.
Open Ledger Accounting Group uses accrual-based workflows to give founders confidence in their numbers—so decisions are based on financial reality, not timing differences.
