For use with Microsoft Dynamics 365 Finance and Operations.
The purpose of this document is to instruct the user on how to create accrual schemes and then create a general ledger transaction using accrual schemes.
In most organizations there are transactions paid in advance for a specific expense and that point of time, we record that as an advance and then on a monthly basis we recognize by reversing the advance or prepaid. Some companies refer to these simply as Prepaids.
For example, let's say the company has an insurance payment for $12,000 for 12 months. They will record the invoice on January 31 and pay the amount to the vendor, but this shouldn't show as an expense. It will be recorded to the Balance Sheet as a prepaid and then every month for the duration of the policy/subscription it has to reverse the prepaid and post the Expense for the specific month. This is what the feature of Accrual Scheme's does for you in D365 Finance.
Creating an Accrual Scheme
- Click General ledger > Journal setup > Accrual schemes.
- Click New to create an accrual scheme.
- Enter an accrual identification and a description of the scheme.
- On the General FastTab, select account numbers in the Debit and Credit fields. The account numbers are used for posting the accrued debit amounts to an asset account, and for posting the accrued credit amounts to a liability account.
- In the Voucher field, select how to handle voucher numbers on the accrual transactions:
- Same voucher for all transactions
- New voucher for each transaction date
- New voucher for each transaction
- If you selected New voucher for each transaction date or New voucher for each transaction in step 5, select a number sequence code for the voucher numbers. If you selected Same voucher for all transactions, the Number sequence code field is not available, because the main voucher number is used.
- Enter a description that you can use on all the accrued transactions. If there is no description in this field, the description from the main voucher is used.
- If you select Calendar or Fiscal in the Accrual basis field, and select an option other than Day in the Posting frequency field, select when the accrued transactions should be posted in the Post in week, month or quarter.
Using Accrual Scheme
- Click General ledger > Journal entries > General journals.
- Click New to create a line and fill in necessary data (Name, Description).
- Click Lines.
- In the Journal voucher form, select a ledger account, enter an amount to be accrued, and then optionally select an offset account.
- Click Functions, and then click Ledger accruals.
- In the Ledger accruals form, select the accrual identification that you want to process.
- Optionally, change the amount in the Base amount field, which is the amount from the journal lines minus the sales tax amount, because sales taxes are not accrued.
- Enter the starting date for the first accrued transaction. The date from the journal line is the default date. The End date field is automatically filled in based on the configuration in the Accrual schemes form, and changes according to the starting date.
- Select whether the account or the offset account on the journal line is the account to be accrued. The accounts defined in the Accrual schemes form are used as offset accounts for the accrual transactions.
- Click Transactions to verify the generated accrual transactions.
- Close the Ledger accrual transactions form and the Ledger accruals
- Close the journal voucher.
- Submit the Journal.
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