Entering Accruals & Delays

This article explains how to enter accruals and delays in Model Reef.

You will learn:

• How to specify when a variable accrues in P&L.

• How to set delays between accrual and cash movement.

• How accruals and delays create receivables and payables.

1

Accrual timing inputs

Accrual timing controls when the revenue or expense is earned or incurred, independent of cash.

You can set accrual timing via:

• Start and end dates in the Timing modal.

• Accrual frequency (daily, weekly, monthly, quarterly and so on).

• Schedules that define specific accrual dates.

Once configured, accrual amounts appear in P&L in those periods.

2

Delay inputs

Delays control the gap between accrual and cashflow. In input fields you might see:

• A delay expressed in days (for example 30, 45, 60 days).

• A delay expressed in months or periods (for example one month after invoice).

• Predefined payment term options such as "end of next month".

The input format may accept natural language such as 30 days or 1 month and convert it internally.

3

How accrual and delay combine

The engine uses a simple rule:

• Accrual determines in which period the P&L entry is recorded.

• Delay determines in which period the cash entry is recorded.

For example:

• Revenue accrues in January.

• Delay is 30 days.

• In a monthly model, cash may fall in February.

• January shows revenue and an increase in Accounts Receivable.

• February shows the cash receipt and a reduction in Accounts Receivable.

Similarly for costs, delaying payment creates Accounts Payable.

4

Entering different delays by category

You may configure different default delays for:

• Revenue variables.

• COGS and Opex variables.

• Staff costs.

• Tax and interest.

When editing specific variables you can override these defaults by entering explicit delay values in the relevant timing fields.

5

Working capital impact

Accruals and delays automatically create and unwind working capital balances:

• Receivables for delayed revenue.

• Payables for delayed costs.

• Tax and interest payables based on their own payment rules.

You do not work with these directly in input fields; they are outputs of the timing engine. The only inputs you maintain are accrual patterns and delays.

6

Validating accruals and delays

After changing accrual or delay inputs:

• Check the P&L to ensure timing of recognition is correct.

• Check Cashflow and Cash Waterfall to ensure cash appears in the right periods.

• Check Balance Sheet receivables and payables to ensure they build and unwind as expected.

If timing is off, revisit the Timing modal inputs for that variable.

Related articles

• Entering Delays

• Entering Schedules

• Actuals Import

• Build a DCF Model (FCFF)