Accrual basis financial reports present a more accurate picture of company’s performance and financial position.  The reason for this is that under the accrual method of accounting, revenues are recognized when they are actually earned, and expenses are recognized in the period in which they are incurred. 

Contrast that with the cash method of accounting, where revenues and expenses are recognized based on the timing of cash payments.  Under this method, the cash payment rather than the underlying economic event drives the timing of transaction recognition.  Often, there are time differences between the cash payments and the business transactions that give rise to these payments.  In such instances, if the cash method of accounting is utilized, the financials will fail to accurately reflect a company's economic performance and standing.  And since the cash method can distort the timing of economic activity in accounting records, it provides a less accurate measure of what is actually happening in the business.  

Because the accrual method presents a more accurate picture of an economic position and performance of a company, it is a preferred method of accounting for many businesses.  Its ability to provide a more comprehensive and accurate picture of a company's financial standing is invaluable for both internal management and external stakeholders. By unveiling the true economic landscape, accrual accounting empowers informed decision-making, ultimately contributing to the stability and businesses growth.