Cost accruals

Vendor invoices arrive days or weeks after the service. If you book revenue on shipment completion but wait for the vendor invoice to book cost, P&L will be wrong. Accruals close the gap.

When to accrue

• Revenue is recognised on shipment (POD, delivery, handover).
• Vendor cost is known (from rate card) but invoice not yet received.
• Period closes.

At close, outstanding cost lines without an AP invoice post as an accrued cost — debit cost of sales, credit an accrual liability.

How accrual amounts are derived

The cost line on the shipment has an expected cost — from the rate card applied at booking. That's the accrual amount. When the vendor invoice arrives:

• Invoice matches expected → reverse accrual, book real AP.
• Invoice differs → reverse accrual, book real AP at invoiced amount, variance hits cost of sales.

Period-end workflow

1. Run accrual scan at close: platform lists every shipment with unmatched cost lines.
2. Finance reviews — are the rate-card amounts still right? Any one-off surcharges missed?
3. Approve accrual batch. Postings go to the ledger.
4. Next period: accruals auto-reverse at period start (standard accounting).
5. Real invoices arrive; AP posts normally. Net P&L impact over two periods = the actual cost.

Automation

The platform runs accruals automatically per a configured cadence (monthly is typical). Finance can still do a manual run mid-period.

Over-accrual risk

If the rate card is obsolete, you over- or under-accrue. Side-effects:

• Margin in the shipment view looks wrong.
• Finance has to reverse a large variance later.

Mitigation: keep rate cards current. The platform flags shipments where the rate card is > 90 days old.

Variance tracking

Per-period accrual variance (accrued vs actual) is a KPI on the finance dashboard. > 5% is a signal the rate-card maintenance needs work.

What's NOT accrued

• Disputed cost — held until resolved.
• Unusual one-off charges not on a rate card — keyed in manually if known.
• Cost lines marked "estimate only, don't accrue" (rare, per tenant policy).

Reporting

Accrual register report lists every open accrual as of period-end — vendor, shipment, amount, ageing. Auditors want this.