Accruals
Accruals are a basic accounting concept where income and expenses are recorded when they're earned or incurred, rather than when money actually changes hands. Think of it like counting your work hours for the whole month even though you haven't been paid yet. Bookkeepers and accountants use accruals to give a more accurate picture of a company's financial health by showing what's owed and what's earned, even if the money hasn't moved yet. This is different from cash accounting, which only records transactions when money is received or paid. This concept is part of what's called "accrual accounting" or "accrual basis accounting."
Examples in Resumes
Managed monthly accruals and reconciliations for a $5M revenue business
Implemented new accrual tracking system to improve financial reporting accuracy
Supervised end-of-month accruals process for payroll and operating expenses
Typical job title: "Bookkeepers and Accountants"
Also try searching for:
Where to Find Bookkeepers and Accountants
Professional Organizations
Online Communities
Job Boards
Example Interview Questions
Senior Level Questions
Q: How would you handle complex accrual adjustments at year-end?
Expected Answer: Should explain process of reviewing all outstanding expenses and revenues, coordinating with different departments, and ensuring compliance with accounting standards. Should mention documentation and approval procedures.
Q: How do you ensure accuracy in accrual calculations for large organizations?
Expected Answer: Should discuss implementing review processes, using accounting software effectively, maintaining detailed documentation, and coordinating with department heads for accurate estimates.
Mid Level Questions
Q: What's your process for monthly accrual entries?
Expected Answer: Should describe gathering necessary information, calculating amounts, entering journal entries, and reconciling accounts. Should mention following company policies and deadlines.
Q: How do you handle accrual reversals?
Expected Answer: Should explain the timing and process of reversing entries, tracking them in the accounting system, and ensuring they're properly documented in the next period.
Junior Level Questions
Q: What is the difference between accrual and cash accounting?
Expected Answer: Should explain that accrual accounting records transactions when earned/incurred regardless of cash movement, while cash accounting only records when money changes hands.
Q: Can you give an example of an accrued expense?
Expected Answer: Should provide a simple example like utilities used but not yet billed, or work performed by employees but not yet paid through payroll.
Experience Level Indicators
Junior (0-2 years)
- Basic journal entries
- Understanding of accrual concepts
- Month-end closing assistance
- Basic Excel skills
Mid (2-5 years)
- Monthly accrual management
- Account reconciliations
- Financial report preparation
- Advanced Excel functions
Senior (5+ years)
- Complex accrual management
- Team supervision
- Process improvement
- Financial analysis and planning
Red Flags to Watch For
- Unable to explain basic accrual concepts
- No experience with accounting software
- Poor attention to detail
- Lack of understanding of month-end closing processes
