What is Accrued Expenses?

Accrued expenses in the context of construction refer to costs that have been incurred but not yet paid for. These expenses typically arise from services or goods that have been received, but payment has not yet been made. In the construction industry, accrued expenses can include costs such as subcontractor fees, equipment rental, and utilities. For example, if a construction company hires a subcontractor to complete a portion of a project, the subcontractor may complete the work before the end of the accounting period, but the construction company has not yet paid for the services rendered. As a result, the subcontractor fees would be considered an accrued expense.Accrued expenses are important to track in construction because they can impact the overall financial health of a project. Failure