accrued expenses

Job Cost Accruals at Month-End: Keeping WIP Honest When Invoices Arrive After the Close

At month-end, work has been performed and materials installed that haven't yet been invoiced. If the accruals aren't booked, the month's job costs are understated, gross profit is overstated, and WIP is wrong. Done right, accruals produce a true picture of project economics each month. Done sloppily, they create swings between months that confuse management and surprise auditors.