Accrual

The accrual setup is done under General ledger/ Maintenance / Allocations & Accruals or directly in a ledger account under General ledger/Chart of accounts. Accruals are used when a transaction - e.g. insurance or rent - is to be accrued beyond e.g. half or a full year, instead of the entire cost being posted in the same period. Allocation is used when, for example, a transaction is to be distributed between several departments - e.g. rent to be distributed between departments. Administration, Production and Lager. Read about distributions here.

Video: Accrual and allocation

Watch a VIDEO about accrual. Accrual is described in the first 28 minutes of the video. Creating the accrual key: minute 1:00-7:00. Accrual in the draft: minute 7:00-11:00. Accrual over 2 lines (e.g. without VAT): minute 11:00-18:20. Accrual of revenue (e.g. subscriptions): 19:00-22:00. Sales orders with accrual: minute 22:00-28:20. The rest of the video is about Allocations and journals tips and tricks. NOTE: Accrual is only finance. For example, the entire expense/income is taken at once on a project, but in General ledger it can be accrued.

Create accrual setup

• Select General ledger/Maintenance/Allocations & Accruals
• Select the Add button or press F2
• Enter a name, such as Insurance, Rent or e.g. an account number
• Select the Save button
• 
• Select the Allocation lines button
• Select the Add button or press F2 or Ctrl+n button
• Fill in the fields as shown in the example below and select the Save button. See a field description below.
• 

Field descriptions allocation lines

Field name	Field Description
Allocations account	For accruals, select the account where the expense/income is to be posted to, e.g. the insurance account. Note! This assumes that you enter the accrual account that you select in the Counter account field below, in your accounting journal as Account. If you don't do this, you need to swap the Distribution account and Counter account in the setup of the distribution, and then enter your accrual on two lines in your accounting journal. See the video here for examples. For allocations, select the account to distribute to.
Fast text	If necessary, select a fixed text. Fixed texts are created and maintained under General ledger/General journals/Fixed captions button
Model	Choose whether you want to make an accrual or a allocation. Accruals are used when a transaction - e.g. insurance or rent - is to be accrued beyond e.g. half or a full year, instead of the entire cost being posted in the same period. Allocation is used when, for example, a transaction is to be distributed between several departments - e.g. rent to be distributed between departments. Administration, Production and Lager. Read about distributions here.
Allocations percentage	For Model = Accrual, 100% is most often selected in this field, as it is the entire amount that usually needs to be accrued. For Model = Distribution, select the percentage to distribute. Allocations create multiple allocation lines with different percentages.
Accrual periods	If necessary, choose how many months are accrued over. However, max 120. However, you can leave the field blank, and then choose the from- and to- accrual date in connection with the posting of the cost to be accrued.
Every nth month	Select the period interval for the accrual - eg. Per month
The 1st of the month	Check this box if you want the accrual items to be posted on the 1st day of the month.
Offsetting account	Select the account where accruals should be posted to, e.g. a status account named Accrued expenses, Prepaid expenses or Prepayments
Dimensions	When distributing, you can specify in your dimension fields which dimension the record should be distributed to.

Accrual of costs

After you have created a accrual setup, you can enter a cost to accrue in a posting journal. You need to enter the lines in the posting journal differently depending on the way you made your accrual setup. See the examples below.

Example 1 - Accrual of omk. (2 lines)

If you specified a balance sheet as the allocation account in the accrual setup and the profit and loss account as the offset account, then you must enter 2 lines in the posting journal. For example, if you have received an invoice for rent of DKK 10,000 + VAT = 12,500 to be accrued over 12 months, enter a line in the accounting journal with the entire cost amount including VAT in the expense account and make a counter entry in, for example, the bank account. Enter an additional line with the amount excluding VAT in the expense account, this time in credit, and fill in the Distribution, Accrual date (from) and Accrual date (to) fields as shown below: TIP! If necessary, select the Post journal button and check the Simulation field so that you can check whether the accrual is done in the desired account and with the right amounts before you do the actual bookkeeping. Note! Accruals can be made forward in time if the periods under fiscal year are set as Open, Not active or Blocked. Remember to check if a fiscal year has been created for the periods you want to accrue in.

Example 2 - Accrual of omk. (1 line)

If you specified your cost account as the allocation account in the accrual setup and your status allocation account as the offset account, then you must enter 1 line in the posting journal. For example, if you have received an invoice for rent of DKK 10,000 + VAT = 12,500 to be accrued over 12 months, enter a line in the accounting journal with the entire cost amount including VAT in your accrual account and select, for example, the bank account as the counter account. Fill in the Distribution, Accrual date (from) and Accrual date (to) fields as shown below: The accrual gives these items

Accrual of income

In the order module, an order can be set up not to be deleted by posting, so that it can be invoiced again and again, at a selected interval. For example, this can be used when billing subscriptions. An accrual code, as you know it from the financial journal, can be set on order, so that the turnover is accrued. Accrual setup Create an accrual setup as described above, specifying your current account in the Allocation account field, for example, as shown here: Sales order Create a sales order in which you set a status account as Revenue account on the sales order so that the revenue from the sales order is posted to that status account. On the order, you must also fill in the Recurrence fields and clear the check mark in the Delete order after billing and Delete complete delivered line fields. Also, fill in the Allocation field with the accrual setup that you created for accrual of your revenue. Enter sales lines in the normal way Tip! If necessary, choose to simulate the posting of the invoice before the actual posting, so you can see if your accrual is set up correctly. For further registration, see Posting to journals