Accrual History

Accruals are a critical accounting practice that allows you to recognize payroll expenses in the period they are incurred, even if the actual cash payment happens later. The Accrual History section automates this process, ensuring your monthly financial statements are accurate.

The dashboard shows a chronological record of all payroll accruals performed in the system, providing a clear trail of your business's employee liabilities.

Understanding Accruals:

When you run a payroll accrual, Agora automatically:

• Debits Salary Expense: Recognizes the cost of staffing on your Income Statement for the selected month.
• Credits Employee Liability: Records the amount owed to staff as a liability on your Balance Sheet.

To accrue payroll for the entire staff, use the Accrue for Month action.

Process:

1. Select Month: Choose the fiscal month you are closing or reporting on.
2. Execute: The system automatically calculates total liabilities based on the active Payroll Entries for all employees.
3. Validate: Review the generated accrual history to ensure all staff members are included correctly.

• Fiscal Month-End Closing: Running a collective accrual on the last day of the month to ensure that month's salary expenses are properly matched against that month's revenue.
• Budgeting for Future Payouts: Using the accrual history to precisely track how much cash needs to be reserved in the bank for the upcoming pay date.
• Yearly Audit Preparation: Maintaining a clean, monthly record of payroll liabilities that external auditors can easily reconcile against actual bank disbursements.
• Departmental Cost Allocation: Analyzing monthly accrual totals to see how staffing costs are trending compared to previous fiscal quarters.

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Automate your fiscal responsibilities with Agora's powerful Payroll Accrual system.