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Author's profile photo Thomas Meder

Accruals for Other Expenses


At month end, an accountant might want to recognize expenses he has not yet received an supplier invoice for.

(Of course, for COGS, you can use the revenue recognition run as well to get COGS realized at the period of delivery. But this is not discussed here.)

Available Solutions

  1. GL Entry Voucher – The first possibility an accountant would think of. Do a posting like “debit: expenses, credit: accrued expenses or outstanding supplier invoices”, and you are done. Disadvantage: No process integration, to be controlled fully manually. Don’t forget to cancel the posting next month.
    Best practice recommendations:
    • Use the Journal Antry Voucher Type 00103 – Manual Posting – JEV with Offset Entry. This entry will be reversed automatically at a specified date, usualle you would do the posting at the close of the period and reverse (Offset Posting Date) by the first day of the next period.
    • Calculate each month from new. Don’t post only the difference to the previous month, but reverse the former entry (as described above) and post the full amount each month.
    • Don’t use another Journal Entry Voucher to cancel your posting. This might result in FX differences. Use the JEV with Offset Entry (see above) or just cancel your journal entry voucher you made for accruals. Clicking on Reverse, will ask you for the posting date. The reversal will be posted with exchange rates of the source posting.
  2. Purchase Order with Goods- and Service Acknowledgement: Even if you don’t use purchasing processes, think about it at least for expenses you want to accrue. To do so, enter a purchase order. Then, enter a Goods and Service Receipt – either by using action New Goods and Services Receipt in the view Purchase Orders in Work Center Purchase Requests and Orders, or in Work Center Goods and Services Receipts. The release of this receipt will post the expenses – at the posting date given there.
    You should activate, at item level, Goods and Services Receipt Expected and Invoice Expected. At purchase order header level, evaluate to activate Prevent Output – you might not want to send this as an PO to the supplier.
    Best practice recommendations:
    • When entering the supplier invoice, use the proposal based on the purchase order.
    • Do the GR/IR clearing run (aka Goods Received – Invoice Received Clearing Run).

Any other solution I forgot? Please post it as a comment, would be great to share more options you have found in your daily work.

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