What’s the difference between cash and accrual accounting?

The main and most important difference between accrual and cash basis accounting lies in the timing of when revenue and expenses are recognised. The cash method of accounting is very simple and is widely used by small businesses and for personal finances. The cash method considers revenue when money is actually received and expenses only when money is actually paid out. In contrast, the accrual method of accounting is more complicated and recognises revenue when a sale is made and an invoice is raised, and for expenses when goods &/or services are ordered, rather when the money is actually received or paid out.