The purpose of monthly accrual processes is to allocate expenses to the proper accounting period and match expenses with related revenues. At the close of each month, accrual processes ensure that all expenses related to that month are properly included in the company’s financial statements. This sample policy outlines a set of procedures for accrued liabilities with the intention that expenses are captured in the period incurred. It focuses on keeping the monthly accrual process in compliance with management’s objectives and generally accepted accounting principles.
This document can be used as a general guide to understand and review this process.