For my 2021/22 accounts, I entered and accrual for my audit and account fees. The actual related invoice arrives in May.
I was expecting to be able to post the expense line to the accrual account to clear the liability. The drop down list does not allow this.
What actions and entries are necessary to ensure the accrual is cleared and the invoice is not double counted as a 2022/23 expense this year?
Many thanks in advance
Hello @Daveh288
I was expecting to be able to post the expense line to the accrual account to clear the liability. The drop down list does not allow this.
Can I ask where you were doing this and what dropdown were you referring to
I was entering the invoice as a purchase. Should I just process as a journal and cash book?
Hello @Daveh288
If you are just moving money within your accounts and there are not vat implications, yes a journal would be ok for this
The way I handle things like this is to make the original accrual journal auto-reverse on the first day of the next accounting year. This puts the “expense” nominal in credit and then when I post the actual purchase in the normal way this cancels out and leaves the expense nominal at zero.
This will also correctly account for any potential differences between the accrual and the final invoice (in case of estimates or additional charges for instance).
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