The Complete Guide to Prepayment Amortization for Finance Teams
Learn how to correctly record, track, and amortize prepaid expenses so your balance sheet is always accurate — without Excel.
Read
Accounting Fundamentals5 min read25 March 2026
Recurring vs One-Off Accruals: How to Manage Each Type
Not all accruals work the same way. Recurring accruals need a different management approach to one-off estimates. Here is how to handle both.
Accruals fall into two broad categories: one-off accruals for a specific cost in a specific period, and recurring accruals for costs that are incurred every month but billed irregularly. Each requires a different management approach.
One-Off Accruals
A one-off accrual is raised for a cost that has been incurred in the current period and will be invoiced in a future period. Once the invoice arrives, the accrual is reversed and the invoice is posted. The accrual then closes.
- Legal fees for work completed in March, invoice expected in April
- Consultant fees for a project finishing at month end, payment due next month
- Bonus provision for a one-time award
Best practice for one-off accruals: set an expected invoice date when you raise the accrual. Review any accrual that has been open beyond its expected date — either the invoice is late or the accrual is no longer needed.
Recurring Accruals
A recurring accrual is raised at the same amount (or a consistent estimate) every month for a cost that is incurred continuously but billed less frequently. Rather than raising and reversing each month, these often remain open on the balance sheet until the invoice cycle catches up.
- Utilities billed quarterly — monthly estimate stays open until the quarterly bill arrives
- Rates or service charges billed annually — monthly portion accrued until the invoice
- Payroll accruals for the period between the last payrun and month end
Managing the Two Types Together
The challenge with mixing both types in the same accruals list is that one-offs can become stale without anyone noticing. A recurring accrual that stays open for six months is probably fine. A one-off accrual that stays open for six months is probably a problem.
The solution is to tag accruals by type and review them with that context. At each close, one-off accruals that have passed their expected invoice date should be investigated. Recurring accruals should be reviewed for whether the monthly estimate is still accurate.
Further Reading
Ready to automate your prepayment and accrual tracking?
CloseKit replaces your spreadsheets with instant balance sheet reconciliations. Start a free trial — no credit card required.
More articles
Accrued Expenses vs Prepaid Expenses: Key Differences Explained
Confused about when to accrue a cost vs when to prepay it? This guide explains the difference with clear examples and accounting treatment for each.
Read
How to Track Accrued Liabilities Without a Spreadsheet
Accrued liabilities are easy to forget and hard to reconcile in Excel. Here is a better way to record, track, and reverse them every month.
Read
Journal Entries for Prepayments and Accruals: Worked Examples
Step-by-step debit and credit examples for the most common prepayment and accrual scenarios finance teams encounter every month.
Read