Reconciling payable accruals

The purpose of payable accruals?

Utilizing an accrual method allows accounting to build a fund for items that are billed on a quarterly, semi-annual or yearly basis.

As a means of recording reoccurring expenses in the correct period.

PAYABLE ACCRUALS

List of supplies

  1. Final invoices from the prior year for yearly billing, previous months for monthly invoices.
  2. Payable accrual worksheet

Time to get started?

Obtain the payable accrual worksheet, as a starting point make a list of all possible expenses that the organization is billed for on a monthly, quarterly, semi-annually and yearly basis.  An example could be postage machine fees billed quarterly, or property taxes billed yearly.   Reviewing the prior year expense in hand, manually adjust the bill approximately 5 percent for the upcoming year (use judgment on this step if the recommend increase seems high, review the prior year billing and adjust the change accordingly).

 

Examples of expenses to accrue:

Company party, Christmas party.

Upcoming expenses which may not be classified as a fixed asset.

Documentation fee stamps.

Miscellaneous service relate items such as filters.

It’s a good idea to create the worksheet before year-end, review and adjust before making entries for the upcoming year.

Does the DMS system or DMS provider provide a re-occurring posting journal template?

As a safety measure, consider using the Excel template and the DMS template if available.

Use the worksheet record all data in the highlighted only area.  The data will populate into the correct field so for January as an example set up the template and input the amounts into the January column, and the template will populate onto the general journal voucher and the worksheet.  For reference, the accrual is always a credit (-), and the expense is always a (+).  Do not reverse this monthly entry.  Review accruals monthly, did something change?  Are you over or under accrued?

 

“They call it coaching but it is teaching. You do not just tell them…you show them the reasons.”

-Vince Lombardi-