Accrual basis accounting

Under accrual accounting, rent is recorded as income on the day it is charged, even if the resident has not paid, and a vendor bill is an expense when it is received, even if it is paid next month.

Accrual reports show what a property truly earned and owed in a period, which makes month-to-month comparisons and budgets more meaningful. Many managers keep accrual books and also produce cash-basis owner reports; a clear cutover date matters when switching methods.