How to set up a one month accrual for over the year end

Answer

To process a one month accrual over the year end, you need to manually post an accrual in the last month of your financial year, then reverse it in month one of the new financial year.

Note: In the following example, you have estimated that approximately £100 of an expected telephone bill relates to the current year.

To post a year end accrual:

Open the Company module then from the Tasks pane click Journal Entry.
Sage Accounts 2012 and below – click New Journal instead of Journal Entry.                                                                                                                                                                                        Enter a reference and date for the journal, then enter the relevant information to record the accrual into the current year’s accounts, for example:

N/C Name Dept Details T/C Debit Credit
7502 Telephone Department Accrual Adjustment T9 100.00 0.00
2109 Accruals Department Accrual Adjustment T9 0.00 100.00

 Note: The date for this journal must be in the current financial year.

To post the journal, click Save then to return to the Nominal Ledger window, click Close.

You have now increased the balance on the Telephone nominal code, and on the Accrual nominal code in the Current Liability section of the balance sheet report by £100. After running the Year End option you should reverse this transaction, this moves the value back from the balance sheet to the overhead nominal code.

To reverse the year end accrual: Open the Company module then from the Tasks pane click Journal Entry. Sage Accounts 2012 and below – click New Journal instead of Journal Entry. Enter a reference and date for the journal, then enter the relevant information to record the accrual into the new year’s accounts, for example:

N/C Name Dept Details T/C Debit Credit
2109 Accruals Department Accrual Adjustment T9 100.00 0.00
7502 Telephone Department Accrual Adjustment T9 0.00 100.00

 Note: The date for this journal must be in the new financial year.

To post the journal, click Save then to return to the Nominal Ledger window, click Close.

You have now moved the value of the accrual from the balance sheet nominal code back to the relevant profit and loss nominal code. This appears as a credit balance on the overhead nominal code and reduces the new year’s balance on the overhead by the value relating to the prior year.

When the invoice is eventually received, post it in the usual way. This leaves the correct value for the new financial year on the overhead nominal code.

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