Hi,
I wish to make an accrual at the end of my financial year for my accountancy fees. I've created a liability account for accurals but am a bit confused on how the record the journal transactions. Could you please confirm how I should enter the accrual (I guess this would be a general transaction but from which account and to which account) at the end of the year, and how I should then enter the actual payment when invoiced (would this be another general transaction or money paid out and again from / to which accounts)?
Thanks in advance for your advice.
Regards,
Gary
Hi Gary,
Here's how I would record the transactions:
On the last day of the financial year create a General Transaction from the accrual liability account to the accounting fees expense account.
On the first day of the next financial year create another General Transaction in the opposite direction - this will reverse the previous transaction.
When you receive your accountant's bill in the next year create a purchase transaction as normal (e.g. as a purchase invoice with the Account set to accounting fees)
Please check the above approach with your accountant as he/she may prefer a different method.
Regards
