Accrual issue

Robbo007_84

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

AndrewLeyland

I know this sound like a stupid question but is this a cash accounting or accrual accounting system you are using?

Robbo007_84

It’s an accrual accounting system.

davealucas

If you are using an accruals system, you would not need to manually reverse the accruals. The system should do it automatically.

Robbo007_84

To be honest the system we’re using doesn’t automatically reverse them. It has to be done manually.

AndrewLeyland

Robbo007_84 said:

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.

WarrenJAllen

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.