Record project accruals

Use project accruals to account for a cost that is due in a particular period, which has not yet been received and entered into Sage 200. This cost could be a purchase invoice, a timesheet or an expense.

You enter this cost as a project accrual, in the period in which you want to account for it. The value of the cost is posted to a balance sheet and a profit loss nominal account.

You must also specify the date you want to reverse the accrual, usually in the following period. When you Reverse the project accrual, a reverse transaction is posted to clear the value of the cost from the balance sheet and profit and loss nominal accounts, ready for when the actual cost is received and processed.

By default the nominal accounts specified on an accrual are:

  • The Balance Sheet nominal account you have specified as the default in the Committed Costs and Accruals settings.
  • The Profit and Loss nominal account you have specified as the default Expense account in the Costs and Charges for the project item.

You can change both these nominal accounts when you enter a project accrual, if required.

Accrual transactions or accrual reversal transactions that are dated in future periods are held in the deferred waiting postings file. These transactions are posted to the nominal ledger when the relevant period is opened.

  • When the project accrual is created, a transaction is posted for the value of the cost. This debits the Profit and Loss nominal account specified on the accrual and credits the Balance Sheet nominal account specified.
  • When the project accrual is reversed, a reverse transaction is posted for the value of the cost. This debits the Balance Sheet nominal account specified for the accrual and credits the Profit and Loss nominal account.
  • You must have selected to Track committed costs and accruals in the Project Accounting settings.

To manage project accruals

Open: Project Accounting > Enter Transactions > Create and Reverse Project Accruals.

The Project Accruals window shows a list of accruals that you have entered. Each accrual can have the following status:

Active

The accrual has been posted but not reversed.

Completed

The accrual has been posted and reversed.

Expired

The reversal date specified for the accrual is a date in the past. The accrual has been posted but not reversed.
  1. To display the details of an accrual in the list, select it and click View.

  2. To add an new project accrual, click Add.

    1. Enter the Accrual details:

      Narrative

      Enter a description of the accrual.

      Reference

      If required, enter the reference for the accrual.

      Second reference

      If required, enter a second reference.

      Posting date

      Enter the posting date.

      This is the date the accrual is posted to the balance sheet and profit and loss accounts specified.

      The accrual transaction is posted when you save the accrual.

      Reversal date

      Enter the reversal date.

      This is the date the accrual value is cleared from the balance sheet and profit and loss nominal accounts.

      The reverse transaction is posted when you Reverse the accrual.

    2. Enter the Project analysis information:

      Project Code

      Select the project for accrual.

      Project Item

      Select the project item for the accrual.

    3. Enter the Costs:

      How you enter the costs for the project item depends on how the cost and charges for that item are set for the project.

      Quantity

      		If applicable enter the quantity for the project item.

      Unit cost

      If applicable, enter the unit cost of the project item.

      This is set to the value set for the project item on the Costs and Charges tab for the project.

      Goods value

      If applicable, enter the cost value for the project item.

      This will automatically equal the quantity multiplied by the unit cost.

    4. Enter the Charges:

      • If you have a charge rate set on the project item, enter the Value to bill.
      • The bill value can also be calculated from the quantity and charge rate, if these have been set.

    5. If required, amend the Nominal codes. The nominal accounts used for balance sheet and profit and loss postings are displayed. To change the nominal accounts, select a new account from the list.

      Balance Sheet

      This is the nominal account that you have specified in for Committed cost and accruals in the Project Accounting settings.

      Profit and Loss

      This is the Expense nominal account specified for the project item.

      Transaction Analysis

      If you use Transaction analysis, select the analysis code from the drop-down list.

    6. To complete the accrual, click OK.

      The accrual transaction is posted to the nominal accounts specified.

      The accrual appears in the Project Accruals list.

  3. To reverse an Active or Expired accrual, select it and click Reverse.

    The reverse transaction is posted with the Reversal date specified.

  4. To delete a completed accrual, select it and click Delete.

    Note: You cannot delete Active or Expired accruals.

See also

Overview

Understanding committed costs for projects