Re-Accrual
What is a re-accrual?
A re-accrual posts a new or corrected figure for a period, after the original accrual has been reversed.
It is the third step of a four-step cycle, and it is the step where the correct number finally arrives. February was accrued at $4,000. That estimate was reversed. The re-accrual posts $3,840, which is what the commission actually turned out to be. The books now carry the right expense in the right month.
It is worth being explicit about why this term needs a page at all: people describing this process almost always skip step three. They say the accrual was reversed and trued up, which sounds complete and is missing the entry that actually records the right number. That omission is a large part of why the cycle is so widely misunderstood.
Where it sits in the cycle
StepFebruary expense on the booksWhat just happened1. Accrue$4,000The estimate is posted at period close.2. Reverse$0The estimate is removed. February temporarily shows no commission expense.3. Re-accrue$3,840The actual figure is posted. This is the re-accrual.4. True-up$3,840Nothing further posts. The $160 difference has already been captured by steps 2 and 3.
Look at row four, because it is where the terminology falls apart. If the reversal and the re-accrual are done properly, the true-up is not a separate entry at all. It is the net effect of the two steps before it. That is why people use the words interchangeably, and it is why the distinction is worth holding: they describe different things even when they resolve into the same movement.
The alternative approach skips steps two and three entirely and simply posts a $160 adjusting entry against the original accrual. That is a true-up in the narrow sense. Both methods are legitimate. Using both vocabularies for one process is what makes a set of books hard to explain.
What this means?
For Finance, reversal and re-accrual together produce a cleaner audit record than a bare adjusting entry, because the books show explicitly what was estimated and what was actual, rather than a net figure and a small correction of unclear provenance. That is worth something when someone asks, months later, how a period was arrived at.
The cost is more entries and more process. Whether that is worth it depends on how material commission is to your P&L and how much scrutiny it attracts. What is not optional is choosing one method and describing it consistently, because a team that uses reversal, re-accrual, and true-up as synonyms will eventually produce a period nobody can reconstruct.
And the point that makes all of this avoidable: a re-accrual is only needed because the first accrual was wrong. An accrual produced from the actual calculation rather than an average rate needs re-accruing when the data changes, which is occasional, rather than every month, which is a broken process wearing an accounting name.
This page explains general accounting concepts and is not accounting or tax advice. Treatment depends on your facts, your jurisdiction, and your auditor. Confirm with a qualified professional.
How Visdum handles re-accruals
Visdum produces the accrual from the plan applied to the deals that actually closed, so the first number is usually close enough that a re-accrual is a response to changed data rather than a monthly ritual.
When data does change, through a corrected deal value, a late arrival, or a reassigned credit, the period is recomputed from source rather than patched, so the revised figure is a genuine recalculation. The audit trail records the original figure, what changed, and the revised figure, which is exactly the evidence a reversal-and-re-accrual approach is trying to create in the ledger. For Finance, that means the story of a period is reconstructable without opening a spreadsheet.
Take a self-guided product tour to see this in action, or read the complete commission close playbook.
Related terms
Accrual Reversal · Commission Expense Accrual · Commission True-Up · Accrued Commission · Recompute
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Frequently asked questions
What is a re-accrual?
A re-accrual posts a new or corrected figure for a period after the original accrual has been reversed. It is the third step of the accrual cycle and the point at which the correct number finally lands on the books. It debits commission expense and credits the accrued liability, exactly as the first accrual did.
Where does re-accrual fit in the accrual cycle?
It is step three of four. Accrue posts the estimate, reverse removes it, re-accrue posts the actual figure, and true-up recognizes the difference. Most descriptions of the process skip step three entirely, saying only that the accrual was reversed and trued up, which omits the entry that records the right number.
What is the difference between a re-accrual and a true-up?
A re-accrual posts the corrected figure in full after the original has been reversed. A true-up posts only the difference between estimate and actual, leaving the original entry in place. If reversal and re-accrual are done properly, the true-up is not a separate entry at all but the net effect of the two.
Why would a company re-accrue rather than just true up?
Because it produces a cleaner audit record. The books show explicitly what was estimated and what was actual, rather than a net figure and a small adjusting entry of unclear provenance. The cost is more entries and more process, so the choice depends on how material commission is and how much scrutiny it attracts.
How often should a re-accrual be necessary?
Occasionally, when the underlying data genuinely changes. A re-accrual is only needed because the first accrual was wrong, so a monthly re-accrual is a sign that the accrual method itself is broken rather than that the process is being run diligently. The fix is a more accurate accrual, not a better correction.
Does the re-accrual entry differ from the original accrual?
No, only the amount does. It debits commission expense and credits the accrued commission liability, exactly as the original accrual did. What has changed is that the figure is now the actual number, or a materially better estimate, rather than the placeholder posted when the period first closed.