How to Track Accrued Liabilities Without a Spreadsheet

Accrued liabilities are one of the most common balance sheet items that finance teams struggle to keep on top of. Unlike prepayments, where you have already written a cheque and the cash movement is clear, accruals require you to recognise a cost before any invoice has arrived. That makes them easy to forget — and when you are tracking them in a spreadsheet, easy to lose.

What Is an Accrued Liability?

An accrued liability represents a cost that has been incurred in the current period but has not yet been invoiced or paid. The most common examples are utility bills for a month that will be billed in the following month, professional fees for work completed but not yet invoiced, payroll for the last few days of a period that falls after the payrun, and bonus provisions.

Under accrual accounting, these costs must be recognised in the period in which they are incurred. You debit the relevant expense account and credit an accrued liabilities account on your balance sheet. When the invoice arrives, you reverse the accrual and post the invoice normally.

Why Spreadsheets Break Down

Most finance teams manage accruals in a shared spreadsheet — a tab listing each open accrual, the amount, the expected invoice date, and whether it has been reversed. This works until it does not. Common failure points include:

• Accruals that are never reversed because someone forgets or leaves the company
• Duplicate accruals posted in two consecutive months for the same cost
• No record of why an accrual was raised, making it impossible to assess whether it is still valid
• GL balance for accrued liabilities that does not agree to the spreadsheet total
• No way to see the history of changes to an accrual without digging through old versions of the file

A Better Workflow for Accrued Liabilities

1. Record accruals with full context

Every accrual should be recorded with the period it relates to, the GL accounts it touches (expense and liability), the estimated amount, and a clear description of what the accrual is for. This context is essential when reviewing open accruals the following month.

2. Choose a reversal method upfront

Most accruals should reverse automatically in the following period. Some are recurring — a monthly utilities estimate that stays on the balance sheet until the annual reconciliation. Deciding upfront which method applies avoids confusion at the next close.

3. Reconcile the GL balance every month

Before signing off the close, your accrued liabilities GL balance should agree to the sum of all open accruals in your tracking system. Any difference is either a missing accrual or a posting error. Finding and resolving it at month-end is far easier than explaining it to an auditor six months later.

Managing Accruals in CloseKit

CloseKit lets you record accrued liabilities alongside prepayments in the same interface. Each accrual links to your GL accounts, carries a full adjustment history, and appears in the reconciliation dashboard so you can see exactly what makes up your accrued liabilities balance on any date. Reversals are tracked automatically — so nothing gets left on the balance sheet by accident.