Close & reporting
Accruals
Expenses and revenue recorded in the period a UK business actually incurs or earns them, even when the invoice or cash has not moved yet, so each month's numbers reflect that month's real activity rather than whenever paperwork happened to arrive.
Management report
Illustrative client · August 2026
GBP
| Line | Aug | Jul | |
|---|---|---|---|
| Revenue | 142,380 | 131,904 | +10,476 |
| Cost of sales | (51,260) | (48,115) | (3,145) |
| Gross profit | 91,120 | 83,789 | +7,331 |
| Payroll | (46,300) | (45,900) | (400) |
| SoftwareNoted | (6,480) | (5,490) | (990) |
| Rent | (8,000) | (8,000) | 0 |
| Other operating | (9,215) | (9,870) | +655 |
| Net income | 21,125 | 14,529 | +6,596 |
Reviewer's note
Software is up on last month after two seats were added mid-month. Revenue includes one milestone invoice that will not repeat next month.
Illustrative. An example of the document, not a client's figures.
Why record a cost before the bill turns up
Utilities, professional fees and some payroll costs regularly arrive weeks after the month they relate to. Recording them as accruals means the month they belong to carries the cost, rather than the month the invoice happens to land, which can distort two months at once if left unadjusted.
What's involved
- A recurring accrual list reviewed and updated each month, covering items such as utilities, payroll and professional fees
- Accrued revenue recorded for work delivered but not yet invoiced
- Reversal of prior-month accruals once the actual invoice or payment lands
- A short note on any new or unusual accrual added in the period
- A quarterly review of the recurring list to catch items that no longer apply
Accruals alongside cash-basis reporting
Not every UK business runs formal accrual accounting for tax purposes, but many still want an accrual view of their books for management decisions. We can maintain that view alongside a cash-basis record kept for other purposes, without the two conflicting or requiring double entry of the same transaction.
Where this connects to your close
Accruals are one of the items reviewed as part of every month-end close, alongside prepayments and fixed asset entries, so nothing here runs as a separate, disconnected process that someone has to remember to do on top of everything else.
Delivery
Reviewed and updated each month, checked by a senior reviewer, inside the Xero, QuickBooks Online or Sage file your business already runs on.
Questions
Frequently asked questions: Accruals
Are accrued revenue and accrued expenses treated the same way?
Yes. Both are recorded in the period the activity happened, then reversed once the actual invoice or payment lands.
Do accruals apply if we run cash-basis books for tax?
Not for tax reporting, but many cash-basis businesses still want an accrual view for management decisions, which we maintain alongside the cash-basis books.
How often is the accrual list reviewed?
Every month, as part of the close, so a recurring item that has changed in size or frequency gets caught before it distorts a period's numbers.
How do you estimate an accrual when the exact bill has not arrived yet?
We use the most recent actual bill, a contract rate, or a reasonable estimate based on usage, and flag it clearly as an estimate rather than a confirmed figure, then true it up once the real bill lands so the estimate does not quietly become treated as fact.
Do accruals get reversed automatically once the real invoice comes in?
Yes, once the actual bill arrives the accrual is reversed and the real figure posted in its place, so the same cost is not counted twice across two periods. We check for exactly this kind of double-count as part of the monthly reconciliation.
Why record an expense before the bill arrives?
So the month it belongs to carries the cost, rather than the month the invoice happens to show up, which can be weeks later.
Do accruals apply if I run cash-basis books?
Not for tax reporting, but many cash-basis businesses still want an accrual view for management decisions, which we can maintain alongside the cash-basis books.
How is accruals priced?
Pricing for accruals depends on your transaction volume, the software you use, and how much cleanup is needed before ongoing work starts. Current ranges are published on the pricing page, and your exact fee is confirmed in writing before anything begins.
What software works with accruals?
Accruals runs inside QuickBooks Online or Xero, whichever you already use. If you are not yet set up in either, we can configure a file in your name so you keep ownership of it once the engagement is under way.
Related services
- Close & reportingPrepaid schedulesInsurance, software subscriptions and other costs paid up front spread across the months they actually cover, instead of hitting one month's profit and loss all at once.
- Close & reportingMonth-end closeA repeatable monthly close that ties every account back to source records and hands you a finished set of financials on a predictable date each month.
Industries
Next step
Talk to the team that would run your books
A short call covers your setup, your software and what a first month would look like. You get a written scope and price after it.