Some of them. An AI agent can post accruals and prepayments that follow directly from evidence, such as goods received but not invoiced or the monthly release of a prepaid contract, at depth 3 with auto-reversal. Accruals that rest on an estimate, such as bonuses or legal costs, are drafted at depth 2 for the financial controller.
What separates the two kinds?
An evidence-backed accrual has a number someone else already fixed. The goods receipt shows 500 units arrived; the purchase order shows the price; the invoice has not come. The accrual is quantity times price. A prepayment release is similar: an annual insurance premium of 24,000 paid in advance releases 2,000 a month, following a schedule set when the invoice was booked.
A judgemental accrual has no such anchor. How much bonus has been earned so far depends on results not yet known. What the lawyers will bill for this month depends on work nobody has priced. The utility bill depends on usage until the meter is read. Someone has to estimate, and the estimate changes profit. That is where a person signs.
When does the agent post, and when does it draft?
| Item | Source | Agent's depth | Sign-off |
|---|---|---|---|
| Goods received not invoiced | Goods receipt and order price | 3 | Sampled by the management accountant |
| Prepayment release | Approved prepayment schedule | 3 | Sampled |
| Recurring service with fixed contract fee | Signed contract | 3 | Sampled |
| Utilities and usage-based costs | Prior bills and usage data | 2 | Management accountant |
| Bonuses and commissions | Plan, results to date | 2 | Financial controller |
| Legal, consulting, audit fees | Engagement letters, adviser estimates | 2 | Financial controller |
| New prepayment schedules | Paid invoice covering future periods | 2 | Management accountant approves the schedule |
Two conditions apply to every depth 3 posting: the period is open, and the entry is set to reverse on the first day of the next period. An accrual that does not reverse will be counted twice when the invoice arrives.
Where must the named approver sign off?
On every estimate, and on every new schedule. The estimate because it is judgement. The schedule because once approved, it drives months of automatic releases, so an error in it repeats each month.
The person who signs should not be the budget holder for the cost. A budget holder approving their own accruals can move cost between periods to manage results. The management accountant or controller is the right owner, and the agent's draft gives them the evidence. The accruals workpaper template sets out what that evidence should include.
An illustrative example
Take a media company closing its month. The agent finds 42 goods receipts with no matching invoice and posts accruals for each at order price, total 186,000, with auto-reversal. It releases 11 prepayment schedules, total 38,000.
It then drafts three judgemental accruals. For the sales bonus, it applies the plan to results to date and proposes 120,000, noting that a large deal expected to close this month slipped. For legal fees, it finds an engagement letter for a contract dispute and an email from the firm's lawyer estimating "around 30,000 for the month"; it proposes 30,000 and labels the source as declared. For electricity, it projects from the last three bills.
The financial controller accepts the bonus and electricity accruals, and reduces the legal accrual to 22,000 after calling the lawyer, who confirms the earlier figure included next month's hearing. The agent posts all three as approved.
What controls make it safe?
- Auto-reversal on every accrual. Checked before posting; an accrual without it is refused.
- Open period only. The agent cannot post into a locked period.
- Sources labelled. Goods receipts and schedules are sealed; adviser estimates are declared.
- Independent approver. The controller, not the budget holder, signs estimates.
- Sampling of depth 3 postings. A person reviews a sample each month and records the result.
The broader question of agent-posted journals is covered in whether an AI agent can post journal entries, and why drafting comes first in finance agents should draft journals before they post them. The month-end routine is set out in how to run month-end accruals with an AI agent, and the wider controls in AI agents for finance: books you can audit.
Questions people ask
Can the agent tell when an accrual is no longer needed?
Yes. It can match arriving invoices against open accruals and flag ones that have sat unreversed or unmatched for too long. Releasing a stale accrual is a judgement, so it drafts that entry.
What about deferred income?
The mirror of a prepayment. Releases from an approved schedule can be posted at depth 3; setting up the schedule is part of revenue recognition and needs approval.
How accurate are the agent's estimates?
Track them. Compare each estimate with the invoice that follows and report the difference. The pattern tells you which estimates the agent handles well and which still need more of a person's input.