The Procurement Glossary » Accrual

Accrual

Finance & Payments

Definition

An accounting entry recognising a cost that has been incurred but not yet invoiced or paid.

Explanation

Accruals keep the accounts accurate at period-end by booking known liabilities before the invoice arrives — closely related to goods-received-not-invoiced. They ensure costs land in the right period rather than when cash moves.

Example

At month-end, finance accrues for delivered but un-invoiced goods so the period's costs are complete.

Related terms

• Goods Received Not Invoiced (GRNI) — An accounting position where goods have been received but the supplier's invoice has not yet arrived or been processed.
• Period-End Close — The accounting process of finalising the books at the end of a period, including reconciling procurement liabilities.
• General Ledger (GL) — The central accounting record holding all of a company's financial transactions.
• Invoice — A supplier's bill requesting payment for goods or services delivered, itemising what was supplied and the amount due.

Frequently Asked Questions

What is Accrual?

An accounting entry recognising a cost that has been incurred but not yet invoiced or paid. Accruals keep the accounts accurate at period-end by booking known liabilities before the invoice arrives — closely related to goods-received-not-invoiced. They ensure costs land in the right period rather than when cash moves.

Can you give an example of Accrual?

At month-end, finance accrues for delivered but un-invoiced goods so the period's costs are complete.

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