Accruals
Spread a one-off cost or income evenly over several months instead of putting it all in one month.
Use Accounting → Accruals when one payment covers several months, for example an annual insurance premium paid upfront or a service contract billed once a year. Each month then carries its fair share, so monthly profit is not distorted.
How it works
- Record the original payment against a holding account, for example Prepaid expenses (an asset) when you pay a year of insurance upfront.
- Create an accrual that moves an equal share from that holding account to the real expense (or income) account each month.
Create an accrual
- On Accounting → Accruals, click New accrual.
- Enter a Description (for example Annual insurance premium), the Total amount, the Number of periods, and the Start Date and End Date.
- Under Accounts, choose:
- Account: the holding account the amount is spread out of (for example Prepaid expenses),
- Reversing account: the account each period posts against (for example Insurance).
- Click Create accrual.
Each period posts:
| Account | Debit | Credit |
|---|---|---|
| Reversing account (e.g. Insurance) | Period share | |
| Account (e.g. Prepaid expenses) | Period share |
For income received in advance (coded to 2400 Unearned Revenue when you invoiced it), choose the income account as Account and 2400 Unearned Revenue as Reversing account. Each period then debits Unearned Revenue and credits income.
Record each month
Open the accrual and click Record next month. Anchor posts the next unrecorded month and marks it Recorded in the schedule. Months are not posted automatically; record them as part of your month-end.
When every month is recorded the accrual moves to Finished.
Cancel an accrual
Cancel accrual stops any remaining months from being recorded. Months already recorded stay in your books. You cannot undo a cancel.
Status
The list shows Scheduled, Running, Finished and Cancelled accruals and can be searched by description.
Related
- Revenue schedules: recognise income from a specific invoice over time
- Recurring journals: the same entry posted on a schedule
- Accrual vs cash accounting
MCP tools
list_accrual_schedules, get_accrual_schedule, create_accrual_schedule, post_accrual_entry, cancel_accrual_schedule.