Accrual accounting can also be more helpful if you're looking to scale your business or attract investors because it provides a clearer picture of long-term profitability. If companies incurred expenses (i.e., received goods/services) but didn’t pay for them with cash yet, then the expenses need to be accrued. Accrued interest refers to the interest that has been earned on an investment or a loan, but has not yet been paid.…