In this article I will describe two different systems used by businesses to record their financial transactions; accrual accounting and cash flows, in the same way I will explain why companies keep accounts and what they are used for. Accounts are ledgers in which transactions involving liabilities, net worth, income, expenses and assets are recorded. These accounts are mainly used to monitor and corroborate the use of available cash; it also aims to produce accounting information that will be expressed as useful information regarding a particular company, activity and enterprise. It is a fact that helps protect the assets and liabilities of the entity. Therefore, even if a company's hierarchical bureaucracy becomes particularly convoluted, the company will be able to track transactions unambiguously. Accrual accounting provides the opportunity for each business to list cash sales or its receivables when sales occur; in fact, income and expenses are balanced in order to provide the company with the profit it is making. So revenues often occur during the period in which they ship the product or the project is complete, not when they receive the cash, and expenses are listed during the period in which they are incurred even if the cash has not yet been paid. In a different way, cash flow accounting is intended to record the movement of money to or from an account, investment or business; but expenses are always recognized until the project or product is paid for, even if previously incurred and previously obtained revenues are not recognized until the company receives the money. This system is most effective when the company tries to track available cash during a paper period. I also defined the difference in using this particular financial tracker in both the long and short cycle; where in the case of a short-term process it will be affected by fewer timing and correspondence problems, even if Finger (1994) stated that from a predictable point of view, short-term cash flows are more efficient. However Accrual Accounting is expected to easily reduce earnings problems when the business or company is exposed to new investments, when it experiences or undertakes financial activities and also major changes. But Dechow, Kothari and Watts (1998) explain that cash flow – in the case of a regression – will have incremental explanatory power. As a result of the analysis it is to be noted that accrual accounting and cash flow have different results which reflect the different environment in which these systems are used.