Insights
What is the journal entry for AI token usage?
The journal entry for AI token usage is a debit to AI services expense, split by the cost center whose agents consumed the tokens, and a credit to an accrued liability for usage metered but not yet invoiced; when the invoice arrives, the accrual is reversed against accounts payable and any difference is booked as a true-up. Tokens are a unit of consumption, like kilowatt-hours; the entry prices them and assigns them.
Pricing the tokens
Providers bill per million tokens with separate rates for input, output, cached input, and sometimes per-request tool calls. The accrual uses your contracted rates applied to metered counts. If you buy through a cloud marketplace or have committed-spend discounts, use the effective rate, not the list price.
The entries
At period end (usage metered, no invoice)
| Account | Debit | Credit |
|---|---|---|
| AI services expense (by cost center) | X | |
| Accrued AI services | X |
On invoice receipt
| Account | Debit | Credit |
|---|---|---|
| Accrued AI services | X | |
| AI services expense (true-up, by cost center) | Δ | |
| Accounts payable | X + Δ |
If Δ is negative, the true-up is a credit to expense.
On payment
| Account | Debit | Credit |
|---|---|---|
| Accounts payable | X + Δ | |
| Cash | X + Δ |
Worked example
September usage for one provider: 38.0M input tokens at $3.00/M, 9.5M output tokens at $15.00/M, 12.0M cached input tokens at $0.30/M.
| Component | Tokens | Rate per M | Amount |
|---|---|---|---|
| Input | 38.0M | $3.00 | $114.00 |
| Output | 9.5M | $15.00 | $142.50 |
| Cached input | 12.0M | $0.30 | $3.60 |
| Total | $260.10 |
Attribution from the gateway: Sales agent 55%, Support agent 45%.
September 30
| Account | Debit | Credit | Cost center |
|---|---|---|---|
| AI services expense | 143.06 | Sales | |
| AI services expense | 117.04 | Support | |
| Accrued AI services | 260.10 |
October 6, invoice $261.40
| Account | Debit | Credit | Cost center |
|---|---|---|---|
| Accrued AI services | 260.10 | ||
| AI services expense | 0.72 | Sales | |
| AI services expense | 0.58 | Support | |
| Accounts payable | 261.40 |
Three choices to make once, in policy
- Capitalize or expense. Token usage is almost always a period expense. Tokens consumed to build an internal-use software asset may be capitalizable under your software development policy; decide the rule once with your auditor rather than per invoice.
- Materiality threshold for accruals. Many controllers skip the accrual below a threshold and book on invoice. Set the threshold in writing and apply it consistently.
- Prepaid credits. If you buy credits upfront, the purchase is a prepaid asset; usage draws it down to expense by cost center each period.
Related
How do I account for AI agent spend in the general ledger? · How to book AI subscriptions in the general ledger
Worked examples are illustrative. Rates shown are examples, not any provider's current pricing. Confirm treatment with your controller and auditor.
Not sure which of your AI costs are being booked? Run the free Agent Spend Assessment.
Onaro Meridian is FinOps for agentic AI: the system of record that attributes, controls and books what AI agents spend.
Brian Diamond
Brian Diamond is a fractional Chief AI Officer and founder of Onaro. He has spent 30 years running infrastructure operations and founded LANStatus, a Connecticut managed services provider and Microsoft partner, in 2001. He holds a Chief AI Officer certification and writes the CAIO Brief on AI leadership for finance and operations.