Dictionary / Accrued Revenue
What does Accrued Revenue mean in accounting?
Quick definition
Accrual & timingRevenue earned, but neither received nor past due. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
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Examples
Wall done, invoice still unsent
On January 28 your masonry crew finishes a $6,350 retaining wall at a day school. You will not invoice until February 5 because you are still waiting on signed completion photos. At the January 31 close, debit Accrued revenue $6,350 and credit Masonry income $6,350 so January's P&L and balance sheet show the earned job. When the February invoice posts in QuickBooks Online or Xero, reverse that accrual so the $6,350 does not hit twice.
An overdue tap-line invoice is AR
On May 6 your beverage-equipment shop invoiced a brewery $2,180 for a tap-line install, terms net 15. It is June 30 and they still have not paid. That invoice is accounts receivable, past due; it is not accrued revenue. Leave it on the A/R aging in QuickBooks Online or Xero and chase the brewery. Moving it to an accrual hides a collection problem as if you had never billed them.
Why it matters
Accrued revenue is the asset for work you already earned that cash has not covered and that nobody is late on. You will post it at month-end when a job is finished and the invoice is not sent yet, or the amount is earned and not yet due. Skip it and that accounting period's P&L understates sales you already delivered; treat a past-due invoice as this term and you hide a collection problem instead of leaving it on accounts receivable. Reverse the accrual once you invoice or collect so the same sale does not hit twice.
Further reading
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What is Accrued Revenue in bookkeeping?
Revenue earned, but neither received nor past due.
When should I use Accrued Revenue?
Use Accrued Revenue 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 Accrued Revenue?
Accrued Revenue is used for accrued revenue 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.