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Rise books transactions as they happen. Even so, not every cost hits the month the invoice is paid: some spreads across several months, and some across several years. This page explains why, so the figures do not surprise you. You do none of this yourself — it is handled in the bookkeeping on your behalf.

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Accruals

An accrual puts a cost in the month it belongs to, not the month the invoice happened to arrive. An insurance policy or a software licence paid for a year does not wreck one month and leave eleven looking tidy. The cost spreads across the whole period it covers, and it unwinds on its own as the months pass. The same applies to payroll. Accrued holiday pay goes onto the balance sheet every month, instead of appearing in one lump at year-end. → Payroll What this means for you: a month’s result tells you what actually happened that month, even when a large annual invoice fell in it.

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Capitalisation

When a purchase serves the business for several years, it is not booked as a cost all at once. It moves to the balance sheet as an asset. This is called capitalisation. Rise spots the purchases that may need capitalising and books the right capitalisation and depreciation for them. You do not have to spot them on an invoice, know the limits or ask for anything. Send your invoices as usual and the rest happens in the background. The accounting team reviews these decisions as part of the monthly check. → Purchase invoices

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Depreciation

A purchase moved to the balance sheet does not stay there. It reaches the result gradually, as depreciation, over the time it is in use. Depreciation comes with the capitalisation, so this asks nothing of you either. The price of the purchase reaches the result a little at a time, instead of wrecking a single month. The balance sheet shows how much of your capitalised purchases is still to be depreciated. To know the effect of future depreciation, ask the accounting team in the chat. → Annual accounts and tax return

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What is expected of you

Nothing. Accruals, capitalisation and depreciation all happen without you asking for them or spotting them on an invoice. If a month’s result looks odd, ask the accounting team in the chat. They explain where it comes from.

Reporting

Where you see the result and the balance sheet.

Annual accounts and tax return

What happens at the end of the financial year.

AI bookkeeping

What the AI handles and what an accountant handles.

Accounting team

Who to ask when a figure puzzles you.