Many small corporations don’t use a full invoicing workflow during the year — and that’s fine. But at year-end, if you’ve earned income that hasn’t been collected yet, you still need to reflect it on the books so the financial statements are correct.

You do not need to retroactively build invoices to fix this.
You can create a simple journal entry that captures the receivable.

This brings your books into accrual without using AR all year long.

When this applies

You should do a year-end AR entry when:

• You completed work before year-end
• The customer hasn’t paid yet
• Payment will arrive in the next fiscal year
• You want revenue recognized in the correct period

What the journal entry does

At its core, the adjustment:

• Increases “Accounts Receivable”
• Increases your Revenue (or the related income account)

This shows that you earned the revenue, even though cash has not been collected yet.

When the customer eventually pays, you simply clear that receivable against the payment.

What this looks like in practice

Instead of:

• Waiting for payment, or
• Misstating your revenue into the following year

…you reflect the income now, using an adjustment entry.

Example snapshot:

• December: Work performed, not paid yet → AR entry
• January: Payment arrives → clears AR

This keeps revenue in the correct fiscal year without overcomplicating your bookkeeping during the year.

Why this method works

This satisfies accrual requirements because:

• Revenue timing is accurate
• You do not need a full AR workflow
• No unnecessary invoicing history
• No extra admin burden during the year

It is the simplest way to stay compliant and accurate at once.

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