Glossary

Accrued income

Accrued income is revenue earned but not yet billed — recognised as an asset so the accounts reflect work genuinely done.

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EarnedNot yet billed

AssetOn balance sheet

Definition

Accrued income is revenue a business has earned but not yet invoiced or been paid for at the period end. It is recognised as an asset so the accounts reflect work genuinely done.

In plain terms

The mirror image of deferred income: here you have done the work but not yet billed it. The matching principle says that earned revenue belongs in this period's accounts, so you accrue it.

Why it matters for your company

Accrued income makes accrual accounts reflect reality, but it is not cash — it is work awaiting billing and payment. A large accrued-income balance flags a gap between earning and collecting, exactly where working-capital finance helps.