Accrual Bookkeeping
What is Accrual Bookkeeping?
Accrual bookkeeping is a method of accounting that records income and expenses when they are incurred, regardless of when cash is exchanged. This approach provides a more accurate and comprehensive view of your financial health, reflecting all earned revenue and incurred expenses within the same period.
Unlike cash-based accounting, which only tracks transactions when money changes hands, accrual bookkeeping helps you align your revenues with the expenses that generated them, giving you a clearer picture of your profitability over time.
What we do in Accrual Bookkeeping
1. Set Up and Maintain Accrual-Based Records
We establish and maintain your accrual bookkeeping system, ensuring that all financial transactions are recorded accurately and in compliance with accounting standards. Whether you’re transitioning from cash basis or starting fresh, we handle the setup process seamlessly.
2. Track Revenue and Expenses
Our team meticulously records your income and expenses when they are earned or incurred, not just when cash is exchanged. This approach provides a precise match of your revenues and the expenses related to them, giving you a true picture of profitability.
3. Manage Accounts Receivable and Payable
We monitor your accounts receivable and payable, ensuring that all transactions are tracked and recorded in the correct accounting periods. This helps you stay on top of what you owe and what you’re owed, improving cash flow management.
4. Inventory and Cost of Goods Sold (COGS) Tracking
For businesses with inventory, we track and manage the cost of goods sold (COGS) to accurately reflect your inventory levels and their impact on your financial statements. This ensures that your profit margins are calculated correctly.
5. Handle Complex Transactions
From deferred revenue and prepaid expenses to accrued liabilities, we manage all complex transactions that are crucial to accurate accrual accounting. This ensures that your financial reports reflect the true economic events affecting your business.
6. Prepare Financial Statements
We prepare detailed financial statements, including balance sheets, income statements, and cash flow statements. These reports provide a comprehensive view of your financial performance, helping you make informed business decisions.
7. Ongoing Financial Monitoring
We provide continuous monitoring and regular updates to your financial records, ensuring that you always have up-to-date information at your fingertips. Our proactive approach helps you stay on top of your finances and identify potential issues before they become problems.
Buy Accrual-Bookkeeping Packages
Accrual Bookkeeping
Essential Ledger
Pro Balance
Premium Ledger
Elite Ledger
Ultimate Ledger
Hours
15
30
50
90
180
Daily Transaction Recording
Bank Reconciliation
Accounts Payable
Accounts Receivable
Inventory Management
Accrued Expenses & Revenue Tracking
Basic Accrual Entries
Regular Accrual Tracking
Comprehensive Accrual Management
Comprehensive Accrual Management
Payroll
2 Employees
5 Employees
8 Employees
12 Employees
Custom
Financial Reporting
Monthly
Quarterly
Monthly
Monthly
Custom
Tax Support
Separate Service
Review Only
Review Only
Review Only
Custom
Balance Sheet/P &L
Monthly
As Needed
As Needed
As Needed
Custom
Advantages of Accrual Bookkeeping
Accrual bookkeeping offers a sophisticated approach to managing your business’s finances. Unlike cash-based accounting, which only records transactions when cash changes hands, accrual bookkeeping provides a more nuanced view of your financial health.
1. Accurate Financial Picture
Accrual bookkeeping captures revenues and expenses when they are incurred, not just when money changes hands. This means you get a clearer, more accurate picture of your financial performance, reflecting true profitability rather than just cash flow.
2. Enhanced Financial Reporting
With accrual accounting, you receive detailed financial statements including balance sheets and income statements that align revenues with related expenses. This alignment provides better insights into your financial position and performance, helping you make informed business decisions.
3. Improved Cash Flow Management
While accrual accounting doesn’t track cash flow directly, it allows you to anticipate future cash needs by recognizing receivables and payables early. This helps you manage your cash flow more effectively, plan for expenses, and avoid liquidity issues.
4. Better Business Planning and Forecasting
Accrual accounting provides a more detailed and accurate view of your financial data, making it easier to develop budgets, forecasts, and financial plans. This insight supports strategic planning and helps you set realistic financial goals.
5. Efficient Management of Accounts Receivable and Payable
Accrual accounting helps you track outstanding invoices and bills more effectively. By recognizing these transactions when they occur, you can better manage collections, payments, and overall accounts receivable and payable.
Who Should Choose Accrual Bookkeeping?
Accrual bookkeeping is ideal for larger or growing businesses that require a detailed and accurate financial picture. It’s particularly beneficial for companies dealing with complex transactions, such as contracts, accounts receivable, and payable, as it records revenues and expenses when they are earned or incurred. This method is also preferred by investors and lenders because it adheres to generally accepted accounting principles (GAAP), providing a clearer view of a company’s financial health. Businesses with long-term contracts, inventory, or those seeking external financing will find accrual bookkeeping essential for making informed strategic decisions.
Frequently Asked Questions
It is ideal for businesses or individuals who prefer to record income and expenses only when cash is received or paid out, rather than when transactions are incurred.
Unfortunately, we don’t support carry forwarding of hours to keep the resource intact for a fixed number of hours and not to get overwhelmed the next month
You can simply click on the Talk and Buy option available under each pricing section that will take you to the filling-up details. Once we receive those details one of our executives will schedule a call and onboard your project.
If the number of hours under the package is exhausted our Ad hoc Hours pricing comes into action which is nothing but the discounted hourly rate or $15 Per hour at the max.
