Timing Differences (Accruals)

Timing Differences

Accounts have to be prepared on an ‘accruals’ basis rather than a ‘cash’ basis. What this means is that your sales / revenue has to be adjusted to reflect the services / goods that have been delivered in the period as opposed to simply what has been invoiced. The same applies to your businesses costs.

There are four types of adjustments to consider. If you are unsure as to an exact figure you should give us your best estimate but remember to note down some workings as to how you came to the figure.

Sales

• Have you raised any invoices in the period which relate to services or goods that have not yet been provided? This may only be a portion of the invoice.

• Have you provided any services or goods in the period that you have not yet invoiced the customer for? Or perhaps you have raised an invoice for the services or goods but the invoice was dated after the accounting period?

Costs

• Have you incurred any costs in the period which relate to services or goods that have not yet been provided to you? This may only be a portion of the cost.

• Have you been provided for any services or goods in the period that you have not yet been invoiced / paid for? This could include unclaimed employee / director expenses.