Accrual:
An accounting entry that records expenses that have been incurred but not yet paid or invoiced. Accruals ensure your financial statements reflect the true cost and liability for a reporting period, even when vendor invoices are delayed.
AP (Accounts Payable):
The function and process responsible for managing a company’s obligations to pay suppliers and service providers. AP handles vendor invoices, payment scheduling, and related approvals, and works closely with AP Accruals to ensure expenses are recognized in the correct period.
AP Accruals:
A process and solution that identifies expenses that should be recognized for a given period, estimates the amounts where invoices are not yet available, and creates accrual journal entries. AP Accruals use vendor, bill, PO, and other AP data to calculate accruals, group them logically, and prepare entries for posting into your ERP.
Accrual Group:
A logical grouping of vendors or transactions used to manage and review accruals as a unit. Each accrual group typically has:
A unique name
An owner (responsible person or team)
A designated credit account for the accrual liability
One or more assigned vendors
Accrual groups help you organize accruals by area (e.g., “Marketing Services Accruals”, “IT SaaS Accruals”) and simplify review, reporting, and posting.
Vendor (Supplier):
An external party that provides goods or services to your organization. In AP Accruals, vendors are linked to accrual groups and accrual journals so you can track estimated expenses and liabilities by supplier and reconcile them once actual invoices arrive.
Journal Entry (Accrual Journal):
The accounting record created by the AP Accruals process to recognize an accrual in your general ledger. Each accrual journal usually includes:
A journal name or reference
Date and posting period
Debit account (expense)
Credit account (accrual or liability)
Amount
Reversal date (if the accrual is automatically reversed in the next period)
References to vendor, entity/company, and other dimensions
Once approved, these journals are sent to your ERP for posting.
Estimated Amount (Estimated Bill Amount):
The amount used to create an accrual when the actual vendor invoice is not yet available. The estimated amount reflects the best available information for the period (for example, contract value, PO balance, service period, or historical billing patterns) and is later reconciled against the actual invoice amount.
Credit Account (Accrual / Liability Account):
The general ledger account used on the credit side of an accrual journal entry. This account represents the liability your organization has for goods or services received but not yet invoiced. Common examples are “Accrued Expenses” or “Accrued Liabilities.”
Debit Account (Expense Account):
The general ledger account used on the debit side of an accrual journal entry. This account represents the expense being recognized for the period, such as “Consulting Expense,” “Software Subscription Expense,” or “Office Supplies.”
Reversal Date:
The date on which an accrual journal is scheduled to be automatically reversed in the ERP. This is typically set to the first day of the following period. The reversal ensures the accrual does not remain on the books once the actual invoice is processed, and helps avoid double-counting expenses.
Entity / Company / Subsidiary:
The legal or reporting entity within your organization to which an accrual relates (for example, a company code, subsidiary, or business unit). AP Accruals associate each journal with an entity so you can:
Segment financial results
Enforce access controls by entity
Produce entity-level reports and reconciliations
AP Accruals Dashboard:
The main console used to monitor AP Accruals activity. It typically shows:
Open and posted accrual journals
Amounts by period, entity, vendor, or accrual group
Status of accruals (e.g., in progress, approved, posted, reversed)
Links to underlying bills, POs, and vendors
The dashboard helps finance and AP teams manage the month-end accrual process efficiently.
Accrual Vendors View:
A vendor-focused view within AP Accruals that shows accruals and related information by supplier. This view makes it easier to:
See all accrual activity associated with a given vendor
Check assigned accrual groups and open journal entries
Investigate discrepancies between estimated and actual invoice amounts
Bills (Vendor Bills):
Vendor invoices or bills that represent actual charges from suppliers. In the context of AP Accruals:
Bills are used as the basis for accrual calculations when available
Existing bills help validate or true-up previously estimated accruals
New bills arriving in the next period are matched against accrual journals to reconcile differences
Purchase Orders (POs):
Formal commitments to purchase goods or services from vendors. AP Accruals often use information from POs such as:
Total PO amount and remaining balance
Goods received or services delivered
Open, unbilled amounts
This information helps determine whether additional accruals are needed for a period, especially when services or deliveries have occurred but invoices are not yet recorded.
Data Management (AP Accruals Data):
The area of the solution where users can view and work with the underlying data used for AP Accruals. This can include:
Accrual journals and their status
Vendors and their assigned accrual groups
Bills, POs, and related AP documents
Data that has been posted to the ERP vs. data still in progress
Access to Data Management is controlled by user roles and permissions.
GL Manager (Role):
A role typically assigned to senior finance or GL team members who:
Configure and maintain accrual flows and rules
Review how accruals are calculated
Have permission to post accrual journals to the ERP
This role focuses on owning the design and operation of the AP Accruals process.
GL Approver (Role):
A role usually assigned to controllers or finance managers who:
Review and approve accruals from a business and financial perspective
Can post approved accrual journals to the ERP
Cannot change the underlying configuration of accrual flows
This separates business approval from technical configuration.
GL Agent (Role):
An operational role for analysts or accounting staff who:
Work with AP Accruals data (vendors, bills, accrual journals)
Help prepare, review, and reconcile accruals
Typically do not have permission to post journals to the ERP or change configuration
GL Audit (Role):
A read-only role for internal or external audit and oversight functions. GL Audit users:
Can view AP Accruals data, journals, and activity history
Cannot change configuration, approve accruals, or post journals
This provides transparency and control without introducing operational risk.