Harness Money

What is accrued revenue?

Accrued revenue refers to income that has been earned but not yet received or recorded in a company’s financial statements. It represents revenue that is recognized before the associated cash payment is received. Accrued revenue occurs when goods or services have been provided to a customer, but the payment is expected to be received at a later date. 

For example, if a company provides services to a client in January but invoices the client at the end of the month, the revenue is considered accrued revenue. Even though the company has not yet received the payment, it recognizes the revenue in its financial statements for the period in which it was earned. The accrued revenue is typically recorded as a current asset on the company’s balance sheet and is later adjusted when the payment is received.