Financial accrual is the term of accounting and bookkeeping that refers to adjustments that must be made before the issuance of company's financial statements. Accruals involve the following types of business transactions as expenses, losses, and liabilities that have been incurred but are not yet recorded in the accounts, and revenues and assets that have been earned but are not yet recorded in the accounts.
Financial accruals in clinical studies:
Financial accruals also involve in clinical studies as clinical financial accruals. The companies have clinical financial accruals that involve the commitments in the form of contract with vendors, study sites and CROs to pay them for the work that has been performed without going through the full payment cycle within the company.
Financial teams at the companies require the accruals of the work performed in previous month by the vendors and sites in order to close the books for the previous month but there can be reason for not approving statements due to the liability that the company still has to pay.
Tips to help with clinical financial accruals:
Tips that can be helpful for clinical financial accruals every month are given as below:
- Companies should come up with the process in term of dates and times that they need to provide the information to their finance teams.
- Setting up the communication process with vendors, CROs and the people who process the site’s payments in order to demand specific information at specific date and time.
- Set up the meeting with the finance team in order to understand their needs and requirements for accruals for every month.
Companies should have the basic understanding of the necessities of the finance team in term of clinical team to set up the process with vendors and CROs to gain appropriate information that can help the finance team to close their books for the previous month.