> ## Documentation Index
> Fetch the complete documentation index at: https://docs.eosb.org/llms.txt
> Use this file to discover all available pages before exploring further.
# Liability and accruals
> What an employer owes, how the platform keeps it up to date every month, and how to read the ledger it is recorded in.
## What liability means
An employer's **liability** is the total of every employee's accrued benefit: what it would owe if every employee left today. It is not money the employer has spent; it is money it owes. The point of the trust is to hold enough money to cover it.
| Figure | Is | Changes when |
| - | - | - |
| **Accrued benefit** (one employee) | Their benefit earned so far | Every month-end; on a salary or start-date change |
| **Total liability** (employer) | The sum of every unpaid accrued benefit | Every month-end; new employees; payouts |
| **Funded amount** | Confirmed payments into the trust, plus investment income | The trustee confirms a payment; income is earned |
| **Funding ratio** | Funded amount รท total liability | Either of the two above changes |
How a single benefit is calculated, with a worked example: [How benefits are calculated](/employer/how-benefits-are-calculated).
## The ledger
Every amount that changes liability or funding is written to the employer's **liability ledger** as an entry. Entries are never edited or deleted; a mistake is put right with a new entry. That is what makes the ledger an audit trail.
### Entry types
| Entry type | Posted when | Effect |
| - | - | - |
| Opening balance | An employee is registered | Adds the benefit earned before they joined the platform |
| Monthly accrual | A month ends (or an employee is terminated mid-month) | Adds the benefit earned that month |
| Funding receipt | A payment into the trust is confirmed | Adds to the funded amount |
| Benefit payout | A benefit is paid out | Settles that part of the liability |
| Benefit rejection | The trustee rejects a settlement | Records the rejection against the employee |
| Manual adjustment, Correction | The platform's operators correct the ledger | Puts right an error. Not available on any screen. |
### Classifications
Each entry also has a **classification**, which says what state the benefit is in:
| Classification | Meaning |
| - | - |
| Live | Benefits of current employees, still accruing. |
| Held | Benefits placed on hold. |
| Disputed | Benefits under dispute. |
| Settled | Benefits that have been paid. They no longer count towards liability. |
| Closed out | Benefits closed out under a close-out arrangement; they no longer accrue. |
## The monthly accrual run
* The run starts automatically the night after a month ends. If the platform was down, it catches up the next night, oldest month first.
* Months are always run **in order**: a later month depends on the one before.
* An employee registered during a month gets their opening balance at the previous month-end; their first monthly accrual is for the month they joined.
* The regulator reviews every run in [Monthly accruals](/regulator/monthly-accruals); the administrator can run a month by hand in [Monthly accrual](/admin/monthly-accruals).
### Run statuses
| Status | Meaning |
| - | - |
| Not run | The month has not been calculated yet. |
| Processing | The calculation is running. |
| Completed | Every employee was calculated. |
| Completed with exceptions | Some employees could not be calculated; see below. |
| Failed | The run stopped. The error is shown on the page. |
### Computation exceptions
An exception is an employee the run could not calculate. **Their benefit for that month is missing from the totals** until it is fixed, so the employer's liability is understated.
| Exception code | Cause | Fix |
| - | - | - |
| MISSING\_SALARY\_BASIS | No salary on the employee's record | Add the salary |
| MISSING\_START\_DATE | No start date on the record | Add the start date |
| INVALID\_EMPLOYMENT\_START\_DATE | Start date is after the month being calculated | Correct the start date |
| UNRECONSTRUCTABLE\_PRIOR\_LIABILITY | No opening balance or previous month to build on | Generate the opening balance |
| CORRUPTED\_PRIOR\_LIABILITY\_BASELINE | The previous figure cannot be trusted | Contact the platform's technical team |
The administrator fixes the record (salary and start date changes go through [approval](/concepts/employee-lifecycle#3-changes-to-the-record)) and runs the month again.
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