An Accrued Expense is a type of debt that has a due or unpaid balance. For most reporting agencies, Accrued Expenses are reported in the period in which it is incurred.
While there are many different kinds and uses of Accrued Expenses, a few examples of an Accrued Expense would be loans with an amount still left to pay off, monthly credit card statements, wages due to staff, or monthly office space expenses. Essentially, anytime a debt is owed, an Accrued Expense transaction is used.
If you’d like to view the transactions related to your accrued expenses, one way to do this is to run a Transactions report and select Accrued Expenses as the Transaction Type. On each Accrued Expense, select the hotdog menu to view Related Transactions. This allows you to see any payments that have been made on the Accrued Expense.
Accrued Expenses are useful for accounting purposes because the expense is already recognized on the books before the payment has been made.
Once you add an Accrued Expense to your database, it will then be reflected in your Balances.