FinTech Glossary

What Are Accrued Expenses?

Accrued expenses are costs that a business has incurred but not yet paid or recorded in cash terms. These expenses are recognised in the accounting period in which they occur, even if payment is made later, following accrual accounting principles.

Common Examples of Accrued Expenses

Accrued expenses typically include:

- Salaries payable but not yet disbursed

- Interest on loans

- Utility bills not yet invoiced

- Vendor services received but not billed

These expenses are recorded as liabilities until they are paid.

Why Accrued Expenses Matter

Accrued expenses ensure that financial statements reflect the true financial position of a business. Without accrual accounting, expenses may be understated in one period and overstated in another, leading to inaccurate reporting. Recognising accrued expenses helps match costs with the revenue they generate, improving financial accuracy and compliance.

Business Context and EnKash Relevance

Tracking accrued expenses requires strong visibility into ongoing obligations and transactions. EnKash helps businesses capture and monitor expenses in real time, making it easier for finance teams to identify pending liabilities, improve accuracy in reporting, and reduce surprises during month-end closing.