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.
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.
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.
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.
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.
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.
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