Accruals Agent
Automate period-end accruals - prepaid expenses, deferred income and reversal.
Identifies prepaid expenses and deferred income from payments and service periods, calculates proportional amounts, creates journal entries and automatically reverses accruals in the following month.
Score Dashboard
What This Agent Does
Period-end accrual is a fully rule-based process: when payment and service period fall into different periods, an accrual is needed. Prepaid expenses for advance payments, deferred income for services received without an invoice. The calculation is arithmetic, the reversal is automatic.
The Decision Layer breaks accruals into six decision steps. Prepaid expenses and deferred income are identified by date comparison (payment vs. service period). The accrual amount is calculated proportionally by service period. The journal entry is created automatically. In the following month, the reversal is automatic.
The only AI component: recognising new accrual items from contracts and invoices. When a contract defines a service period that spans periods, the LLM recognises the accrual requirement and suggests the posting.
Micro-Decision Table
Identify prepaid expense Is there an advance payment whose service falls in a future period? Rules Engine Auditor
Date comparison: payment date vs. service period
Decision Record
Challengeable: Yes - rule application verifiable. Objection possible for incorrect data or wrong rule version.
Challengeable by: Auditor
Identify deferred income Was a service received for which no invoice exists yet? Rules Engine Auditor
Date comparison: service delivery vs. invoice date
Decision Record
Challengeable: Yes - rule application verifiable. Objection possible for incorrect data or wrong rule version.
Challengeable by: Auditor
Calculate accrual amount What amount applies proportionally to the current period? Rules Engine Auditor
Arithmetic: total amount divided by service months times months to accrue
Decision Record
Challengeable: Yes - rule application verifiable. Objection possible for incorrect data or wrong rule version.
Challengeable by: Auditor
Create journal entry What is the accrual journal entry? Rules Engine Auditor
Posting logic: prepaid expense to expense or income to deferred income
Decision Record
Challengeable: Yes - rule application verifiable. Objection possible for incorrect data or wrong rule version.
Challengeable by: Auditor
Reversal in following month Is the accrual reversed as scheduled? Rules Engine
Automatic offsetting entry at the start of the following month
Decision Record
Challengeable: Yes - rule application verifiable. Objection possible for incorrect data or wrong rule version.
Recognise new accrual items Does a new contract or invoice create an accrual requirement? AI Agent Auditor
LLM recognition of cross-period service periods from contracts and invoices
Decision Record
Challengeable: Yes - fully documented, reviewable by humans, objection via formal process.
Challengeable by: Auditor
Decision Record and Right to Challenge
Every decision this agent makes or prepares is documented in a complete decision record. Affected parties (employees, suppliers, auditors) can review, understand, and challenge every individual decision.
Prerequisites
- ERP system with accruals module (SAP FI, DATEV, Sage or equivalent)
- Access to contracts and invoices with service periods
- Defined chart of accounts for accrual postings
- Automatic reversal mechanism in the posting system
Governance Notes
Predominantly rule-based (0H / 5R / 1A). No human decision in the standard flow - the entire accrual is deterministic. HGB Paragraph 250 (prepaid and deferred items), HGB Paragraph 252 Abs. 1 Nr. 5 (period-based profit calculation) as direct legal bases. GoBD-compliant: every accrual is archived with calculation basis and reversal date.
Tax-relevant: incorrect period-end accrual shifts expenses or income to the wrong period and affects the tax burden. During tax audits, correct period allocation is a standard audit point. Paragraph 203 StGB relevant: accrual items can reveal contractual terms.
§203 StGB-relevant data is encrypted end-to-end and never passed to AI models in plain text.
Process Documentation Contribution
Infrastructure Contribution
The period-end accrual logic is used by all agents that create time-period-based postings. The automatic reversal pattern (posting plus offsetting entry in the following month) is the base pattern for all temporary postings. The LLM-based recognition of new accrual items from contracts is a reusable pattern for the Contract Compliance Agent and Revenue Recognition Agent. Builds Decision Logging and Audit Trail used by the Decision Layer for traceability and challengeability of every decision.
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Frequently Asked Questions
How are annual subscriptions accrued?
An annual subscription starting in October is accrued proportionally: 3/12 to the current year, 9/12 as prepaid expense to the next year. The monthly reversal runs automatically over the 9 following months.
What happens with mid-year contract changes?
The agent recognises contract changes that affect the accrual amount and recalculates the accrual. The original accrual is reversed and replaced by the corrected one.
How does the LLM recognise new accrual items?
The LLM analyses contracts and invoices for service periods that span periods. Example: a lease with quarterly advance payment automatically triggers a monthly accrual. The suggestion is presented to the clerk for confirmation.
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