Revenue that has been earned by providing goods or services but has not yet been billed or received as payment.
Accrued Revenue (also called unbilled revenue) represents income earned during the current period but not yet invoiced to the customer. Under accrual accounting, revenue is recognized when earned, regardless of when payment is received. This is common in service businesses, subscription models, and long-term contracts where work is performed continuously but billed periodically. Accrued revenue appears as a current asset on the balance sheet until invoiced.
A consulting firm has a ₹12,00,000 annual contract (₹1,00,000/month). By March 31, they've completed 3 months of work but only billed for 2 months. Accrued Revenue = ₹1,00,000 (1 month earned but unbilled), recorded as a current asset.
Ensures accurate financial reporting and record-keeping
Helps maintain regulatory and tax compliance
Enables better-informed business decisions
Improves operational efficiency and cash flow management
Accrued revenue is earned but NOT yet billed (asset), while deferred revenue is billed but NOT yet earned (liability). They are accounting opposites — accrued revenue means you've done the work but haven't invoiced; deferred revenue means you've collected payment but haven't delivered.
Accrued revenue is reversed when the invoice is actually issued to the customer. At that point, it moves from 'Accrued Revenue' (asset) to 'Accounts Receivable' (asset) and the revenue is formally recognized on the income statement.
An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.
Payment received from a customer for goods or services that have not yet been delivered, recorded as a liability until the obligation is fulfilled.
The accounting principle that determines when and how revenue is recorded in the financial statements, based on when it is earned rather than when cash is received.
Money owed to a business by its customers for goods or services delivered but not yet paid for.
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