Your Accruals and Deferrals Are Distorting Your Numbers More Than You Think

By John Charette, CPA, CMA – Owner & Your CFO at Phoenix CFO Solutions

You’re running the business. Work is getting done. Revenue is coming in. Bills are getting paid. But when you look at your reports, the numbers never feel as steady as the work you’re putting in. One month looks great. The next looks flat. Expenses spike for no clear reason. Revenue jumps even though nothing changed in operations. You’re doing the work, but the numbers don’t reflect it. That disconnect is the sign of reporting that isn’t recognizing revenue and expenses in the right period.

Your gut says performance is consistent. Your books say otherwise. And if you’re not careful, that gap turns into bad decisions, misread trends, and confusion about where the business actually stands.

That’s where proper accruals and deferrals change everything. In this post, you’ll see what accurate timing looks like, why your numbers feel unstable, and how Phoenix CFO Solutions builds reporting systems that finally tell the truth.

When Accruals and Deferrals Work, Everything Feels Steady

When your revenue and expenses land in the month they belong, the entire financial picture calms down. Work performed in March shows up in March. Costs tied to that work follow the same path. Projects that span several weeks no longer blow up one month while leaving the next one empty. Each period reflects the effort and output that happened in that period—nothing more, nothing less.

When the timing is right, your reports stop swinging without cause. Margins start to make sense. Trends become clear. And you begin each month with numbers that match reality instead of timing noise. You make decisions faster because you’re operating with steady, consistent information, not a moving target.

But When It Breaks, Everything Feels Misleading

Most small businesses live in the opposite reality. Revenue gets recognized when the invoice goes out, even if the work happened earlier. Expenses hit whenever the bank clears them, even if they relate to last month’s operations. Deposits land before the work is delivered. Vendor bills get recorded weeks late. And every time you think you understand why the numbers moved, something else throws them off.

The issue isn’t the work you’re doing. It’s the timing underneath the numbers. Without proper accruals and deferrals, months look artificially high or low. A client paying late makes a healthy month look weak. A large invoice hitting early makes a flat month look strong. Expense batches distort margins that were actually steady. By the time you finish the close, the story is already skewed.

And the worst part? You start doubting your own performance. If the numbers don’t reflect the work, how can you trust the decisions that follow?

Where It Finally Turns Around

This is where Phoenix CFO Solutions steps in. We rebuild your reporting structure so your numbers stop bouncing around for no reason. We align revenue with the work performed. We match expenses to the period they support. We defer deposits when they relate to future work, accrue costs that happened but haven’t been billed yet, and clean up timing rules that keep throwing your results off.

The result is a reporting system that gives you a calm, stable view of your operations. Your margins become consistent. Your trends become obvious. Your performance becomes clearer. And you stop wasting hours trying to figure out why the numbers don’t match what actually happened.

Why It’s Time to Fix This

Accruals and deferrals don’t just clean up your books. They stabilize your entire financial picture. With the right system, you get accuracy, clarity, and confidence in your numbers every single month.

We’ll tighten your reporting until it finally reflects the work you’re doing.
You should’ve fixed this already.
The next best time is today.