Accrual issue

Robbo007_84
Robbo007_84 Registered Posts: 6 New contributor 🐸
Hi

I have an issue at my work place that I need help with.

So basically I have accrued 2 months of expenses in August and September, each for the same amounts of £2000.

In October, I eventually received the expense invoice of £6000 that covers the months of Aug to Oct. So naturally I reversed the aug and sept accruals in October which I believed would reduce the invoice total from 6k to 2k (the remaining 2k would be the Oct charge).

However, the expense balance is still showing as the full 6k! I’ve checked the periods which the entries were posted and they have been entered in the correct period.

Am I missing something here?
Thanks
RJ

Comments

  • AndrewLeyland
    AndrewLeyland Registered Posts: 41 Regular contributor ⭐
    I know this sound like a stupid question but is this a cash accounting or accrual accounting system you are using?
    RegardsCiaran Andrew Leyland
  • Robbo007_84
    Robbo007_84 Registered Posts: 6 New contributor 🐸
    It’s an accrual accounting system.
  • davealucas
    davealucas Registered Posts: 145 Dedicated contributor 🦉
    If you are using an accruals system, you would not need to manually reverse the accruals. The system should do it automatically.
  • Robbo007_84
    Robbo007_84 Registered Posts: 6 New contributor 🐸
    To be honest the system we’re using doesn’t automatically reverse them. It has to be done manually.
  • AndrewLeyland
    AndrewLeyland Registered Posts: 41 Regular contributor ⭐

    It’s an accrual accounting system.

    Often happens with people i work with where that got a system that does accruals but actually setup on cash basis. but does sound like you need to manually reverse them.
    RegardsCiaran Andrew Leyland
  • WarrenJAllen
    WarrenJAllen Registered Posts: 22 New contributor 🐸
    Have you checked to make sure the GL postings for the reversals are going to the correct accounts?

    Keep in mind that the accrual won’t affect the balance of the invoice itself, but rather the amounts in the general ledger.
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