Dictionary / Accrue
What does Accrue mean in accounting?
Quick definition
GeneralTo grow; to increase; to accumulate. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
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Examples
Loan interest grows before you pay the bank
You run a coffee shop and still owe a credit union $9,600 on a roaster loan as of February 3. The credit union charges interest daily on that unpaid balance. On February 14 the loan portal shows $22 has accrued since February 1; by February 28 it shows $46. That extra $24 grew because more days passed on the same $9,600, not because you borrowed more. At close, interest expense should match the $46 that accumulated, not the later ACH; the amount keeps growing until you pay.
Wages pile up before payday
You run a grooming shop, and your two groomers earn $160 a day combined on weekdays. The pay period is Monday October 6 through Friday October 17, paid Friday October 24. By Wednesday October 8 three days have already accrued ($480); by October 17 the unpaid wages have grown to $1,600. October's P&L should include that $1,600 in payroll expense and wages payable before the payroll run. Do not copy last month's accrual amount; count the unpaid weekdays that have actually accumulated.
Why it matters
Accrue is the verb: a cost or an amount of income grows as time passes, even when you have not paid or collected yet. You will see this most months if you have a loan, hourly staff, or a vendor who bills after the work; interest, wages, and similar costs pile up day by day, and the accrual is only the entry that records what already grew. Wait for the bank feed or payday and that accounting period misses the growth. Treat accrue as a one-time close journal and ignore the running total, and you understate the amount still accumulating.
Further reading
Compare this term with reference material from other accounting and finance websites.
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What is Accrue in bookkeeping?
To grow; to increase; to accumulate.
When should I use Accrue?
Use Accrue when the transaction facts match its definition and you need the ledger and financial statements to reflect the correct account and period.
What is a common mistake with Accrue?
Accrue is used for accrue entries, while Abandonment covers a related but distinct bookkeeping purpose. Review both terms before posting unusual transactions. A common mistake is applying it by label only instead of checking the underlying transaction details.