Rebates

Accrual

Also called: Rebate accrual · Provision

The liability or receivable recognised as a rebate is being earned, before it is actually settled.

Accounting requires that a rebate be recognised in the period it is earned rather than the period it is paid. So every rebate programme carries a running accrual, posted to the general ledger, representing what is owed or owing so far.

There are two ways to compute it. A **transaction-level accrual** evaluates each qualifying line against the agreement rules as it happens, so the balance is always defensible and drillable back to its source rows. An **estimated accrual** applies an assumed rate to aggregate volume, which is faster to implement and produces true-up variances of 10–30% at settlement.

The second approach is also what makes month-close painful: because the accrual is not linked to the transactions, a restatement of the base data does not flow through, and there is no way to answer "which lines produced this number".

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