Solution Properties
Solution ID:
250520142802780
Last Modified Date:
Wed May 21 09:49:41 UTC 2025
Taxonomy Path:
Case category//How do I...//processing
Author:
[email protected]
Set up and process manual accruals
Description

Accruals adjust your income or expenses to match the periods they relate to on your Profit and Loss report.

For example, you receive an electricity bill at the end of a quarter that covers January, February and March. Posting the bill in March shows the full amount as overheads on your Profit and Loss report.  To spread the cost evenly across the three months, you can post accrual journals. 

NOTE: In Sage 50 Accounts Professional, you can post accruals automatically as part of the Month End routine. To upgrade, leave your details and we'll be in touch.

Cause
Resolution

Create the accrual nominal code

  1. Go to Nominal codes, then select New.
  2. Complete the nominal record details as follows:
    • N/C - Enter the number for the nominal code you want to create, for example, 2109
    • Name - Enter the name for the nominal code, for example, Accruals
  3. Click Save.

If required, repeat the above steps to create further nominal codes.

Post manual accruals

In the examples below, you pay your electricity every three months in arrears. The average charge is £/€300 so you post £/€100 each month for three months. When you receive the actual bill, it's for £/€350.

There are three steps in this process:

▼ Post the accrual journals

For each month, transfer the monthly value from the overheads nominal code, for example electricity, to the Accruals nominal code. 

 NOTE: Post these journals in line with the periods that you run your Profit and Loss report. For example, post the journals monthly if you run your profit and loss every month. If the period is partly in the current year and the rest in the next year, post the accruals to reflect this.

  1. Go to Nominal codes, then select Journal entry.
  2. Enter the reference and date for the journals.   NOTE: Enter the date as the last day of the month you're posting. 
  3. Enter the relevant information to record the accrual, for example:
N/C Name Details T/C Debit Credit
7200 Electricity Monthly accrual T9 100  
2109 Accruals Monthly accrual T9   100
  1. Click Save and Close.

This journal creates a debit balance on the overheads nominal code on your Profit and Loss. This also creates a credit balance on the Accruals nominal code on your Balance Sheet.  After posting all of your accruals, follow the To post the accrual reversal section.

▼ To post the accrual reversal

The balance on the Accruals nominal code increases every month, until the final month when you post this reversal. The reversal clears the balance on both the Accruals code and the relevant overheads nominal code. You're then ready to post the actual transaction.

  1. Go to Nominal codes, then select Journal entry.
  2. Enter the reference and date for the journals.   NOTE: Date this in the last month of the accrual period. 
  3. Enter the relevant information to record the reversal, for example:
    N/C Name Details T/C Debit Credit
    2109 Accruals Accrual Reversal T9 300  
    7200 Electricity Accrual Reversal T9   300
  4. Click Save and Close.
▼ Post the actual transaction

When you make the payment or you receive the invoice, post this as a bank payment or purchase invoice. 

 TIP: To split payment over more than one month, you can part pay the purchase invoice each month with several purchase payments.

 

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