Definition · revenue recognition
Accrued revenue
Accrued revenue is revenue earned but not yet billed or collected, recorded as an asset until invoicing catches up. For accrued revenue, the important details are the accounting period, source evidence, reviewer, materiality threshold, and control purpose that make the treatment auditable during close, reporting, and later review.
Also known as unbilled revenue, accrued income, contract asset
Why it matters
Understanding accrued revenue matters because close, reconciliation, and audit work depend on consistent timing, source evidence, review thresholds, and ownership. A loose definition creates avoidable rework. When the term is tied to a source system, owner, and review cadence, it becomes easier to audit assumptions, catch changes early, and keep operators aligned.
In practice
Revenue example
Teams use accrued revenue when they need to separate customer, contract, billing, recognition, and cash effects. That prevents a revenue movement from being misread as growth, churn, expansion, or timing noise.
Review example
Accrued revenue should be reviewed whenever the source system, calculation logic, time period, or decision owner changes. That keeps the definition useful instead of letting it drift into a label.
In practice, teams should define accrued revenue with a clear source, owner, time period, and decision before they use it in reporting, planning, or operating reviews.
Understanding accrued revenue matters because close, reconciliation, and audit work depend on consistent timing, source evidence, review thresholds, and ownership. A loose definition creates avoidable rework. When the term is tied to a source system, owner, and review cadence, it becomes easier to audit assumptions, catch changes early, and keep operators aligned.
A strong workflow for accrued revenue separates the definition from the action: first agree what the term means, then decide how it is measured, when it changes, and who is accountable for the next step.
FAQ
What is accrued revenue?
Accrued revenue is revenue earned but not yet billed or collected, recorded as an asset until invoicing catches up. For accrued revenue, the important details are the accounting period, source evidence, reviewer, materiality threshold, and control purpose that make the treatment auditable during close, reporting, and later review.
What is the difference between accrued and deferred revenue?
The boundary for accrued revenue differs from related terms by scope, source data, time period, and decision use. In this glossary, it covers revenue earned but not yet billed or collected, recorded as an asset until invoicing catches up, so teams should compare those boundaries before using it in reporting or planning.