Sales accruals enable you to generate accruals against a sales ledger invoice or credit note and accrue revenue over a specified number of periods.
For example, if you raise an invoice for an annual licence renewal but do not want to realise the full value of this sale to the current accounting period, but want to portion 1/12 of the value per month.
The Accruals are subscription driven, so to be able to use it, you need to ensure that your business is subscribed to it.
Once you have the subscription, there are a few steps that you need to carry out to set up your accruals structure.
The first set up is done within the System Module of Financials, which is security profile permissions driven.
If you have access to System Options, you can follow the steps below to set it up for your Sales Ledger.
Set up accruals in the Sales Ledger System Options
Click System then Options then click Sales Ledger Options.
Under the Transactions section, select the Use Sales Ledger Accrual option.
A new field called Accrual Nominal is now displayed for you.
You can set up a default nominal account to be used for the accrual and this nominal pulls through onto any sales ledger invoice or credit note that you can use accruals for.
You can also leave this blank and manually enter your relevant nominal account on the transactions themselves.
Please note, if the currency of the accrual nominal account specified in the Sales Ledger Options does not match the currency of the transaction, then it will not be pulled through and you must manually enter an appropriate nominal account that matches the currency of your transaction.
This will not update the nominal account you have set in the Sales Ledger Options, and will only save against this transaction.
You will not be able to save any transaction without having an accrual nominal specified.
Click Save.
You now have to set up the analysis record or records that you wish to use with sales ledger invoice or credit note that update you accrual nominal.
You can set up an existing or newly created analysis record to be an accrual analysis by following the steps below.
Specify which analysis records you want to use for accruals
Click Debtors then Settings then click Analysis.
Note: All analysis records are displayed for you.
Find the analysis you wish to set up as an accrual analysis, highlight it and click on the Edit button. Alternatively you can create a new analysis record and set it up to be an accrual analysis.
On the Summary section, select the Accrual checkbox.
A new field called Periods is now displayed for you.
You can set up a default number of periods which will be pulled through to all sales transactions and you can manually update it on any sales ledger invoice or credit note that you use.
You can also leave this blank and manually enter your number of periods on the transactions themselves.
You can save any transaction with zero period, but you cannot save it with a negative value.
When you are done with the above, click Save.
Your selected analysis record is now ready to be used on sales ledger invoices or credit notes. For more information on how to use an accrual analysis on transactions, please refer to our Posting a sales accrual invoice or credit note article.