What are accruals in accounting?

In accounting and finance, an accrual – or accumulation – of something describes when interests or different investments add together over a period of time. But specifically on an accounting balance sheet, accruals are associated with liabilities and non-cash-based assets. Such accrual-based accounts include accounts payable, accounts receivable, goodwill, deferred tax liability and future interest expense.

In accounting, a separation of earned revenue or incurred expenses is separated from the actual flows of cash involved. This is applicable if, for example, you deliver a product sold to a customer but expecting the payment for it at a later stage. On your business balance sheet, you would recognise the transaction as revenue in its current income statement due to the agreement of sale and delivery of product. At the same time, the proceeds are counted as an accrued income (asset) on the balance sheet for that accounting period. Then, this accrual is then adjusted for once cash payment is received.

Where accrued revenue is recognised before cash is received, accrued expenses differ in that it is recognised before cash is paid out. An accrued expense is a liability whose timing or amount is uncertain because an invoice has not been received.

Accruals are also applied in payroll as well – such as in annual leave of sick leave in an employment contract. Additionally, accruals are also applied to length of service to employment (e.g. for long-service leave) as well as trial periods of new employees. With some employers, accrued leave can be rolled over of carried over into the next year – in which accrual-based accounting principles apply similarly.

These are just some of the basic concepts of how tax accounting firms in Melbourne apply accruals in their work. But the main advantage to take away from accrual-based accounting is that it gives a better picture of the efficiency of transactional processes. From there, it helps accountants and you, the account holder, ensure that you are receiving and paying monetary obligations in reasonable time. It can be quite confusing to track if you’re business is a little more complicated.

Why picnics are good for you

Melbourne is warming up and bringing lots of sunshine, so what better way to take advantage of this than by going on a picnic?

Picnics have been known to be a great activity to organise with family and friends, allowing socialisation and the enjoyment of good food, whilst providing benefits to your own health and wellbeing.

We whittle down the popular aspects of picnics and let you know why you should plan one for your next road trip.

Leave your desk

Sometimes you just need to getaway from your desk, your headache inducing computer screen, and that pile of paperwork that seems to be growing. Letting yourself experience something out of your ordinary routine is a great way to boost your energy, especially if the daily grind is getting you down. Whether it’s a weekend getaway or a day trip in the middle of the week, make sure to take some time out to let your senses explore further than just the far end of the workplace kitchen.

Improve your health

Everyone knows the outdoors provides an abundance of health benefits that most of us rarely get in this modern age. Being out in the sun will give you some much-needed Vitamin D, while the surrounding trees and general plant-life will provide you with fresh oxygen. Spending time in nature, especially if you go barefoot for a while too, has also been said to alkalise the body by balancing the body’s negative and positive charges (something which doesn’t happen when we have shoes on), which in turn is said to help lower blood pressure, and reduce stress and inflammation.

Get back to nature

Spending time with your loved ones in the great outdoors, soaking up the sun and eating good food is a great way to unwind and energise yourself after a stressful week at work. It allows you a small time to escape from the mundane responsibilities of your everyday life, and helps you put into perspective what’s really important. Some quiet time without deadlines and meetings will allow you to really look around and appreciate what nature offers – blooming flowers, towering trees, beautiful bird songs, a bubbling creek.

Enjoy good food and drinks

Its always fun to get a bit indulgent with picnic fare – whether it’s your favourite fast-food guilty pleasures, or if you choose to go a bit upmarket and splash out on exotic food and wines. Whatever you choose, you know it just has to be something out of the usual. Picnic time is to escape and enjoy, and maybe even try something new while you’re at it. If you’d prefer to leave the stress of picking food and drink to the professionals, you can always try a picnic package with your own private picnic site at Winery Mornington Peninsula.

You can fit in some leisurely exercise

Picnics are a great way to fit in some physical exercise if the desire so arises. Being with family and friends can call for some fun activities that can get the blood pumping, like a game of cricket or frisbee. If you’re willing to bring props then sack racing, volleyball, badminton or even garden croquet can be an option. For a more leisurely tempo, a relaxing walk on a park track can work, or for something more vigorous you can try a hike up more difficult terrain.

Activities for all

If you’d much rather take it easy, then there are still some great activities for all the family to take part in. If young children are present, a treasure hunt or scavenger hunt can be organised, which will provide much entertainment until the day’s end. You can also bring an “activity box” to keep everyone occupied, with card games, board games and books. For a more adult event, a few bottles of wine, like award-winning Mornington Peninsula Pinot Noir, can help start off some fun drinking games. Remember, outdoor drinking in certain public areas is against the law, so make sure you check your local laws and regulations on where you can consume alcohol, and what time limits are in place (for instance, some public parks in the Yarra Council area allow drinking between 9am to 9pm). For peace of mind and greater freedom with alcohol consumption, hiring a private picnic site is suggested.