Accruals for expenses

Overview

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Accounting teams spend a lot of time chasing down employee expense compliance at month's end. Instead of the chase, book those expenses as accruals and revisit them in the following month when they are compliant. With accruals, you can prepare and export card and reimbursement expenses as accruals instead of actuals, even if they aren’t yet compliant. We’ll post the accrual and create the auto-reversing journal in your ERP. Accruals are exported as journal entries to your ERP. When you export an expense as an actual, we use your currently configured ERP export type for posting. Make sure your Card accruals liability and Reimbursement accruals liability accounts are set up in Integration settings. If you have multiple entities, go to Integration settings > Entity settings to set up these GL accounts for each entity. Note: The accruals feature is only available for NetSuite, Quickbooks Online, Sage Intacct, Oracle Fusion, Workday, and Custom Accounting users.

Prepare and export expenses as accruals

Step 1: Go to Accounting > Prepare. Step 2: Select the transactions you want to post as accruals and click Prepare as accrual. These transactions will be moved to Review, with an Accrual status in the Prepared as column. Step 3: Go to Review and confirm that the transactions are correctly categorized. Step 4: Select the transactions you want to export as accruals and click Export to open the details window. Step 5: Choose an appropriate auto-reversal date for your accruals, select your Export type, and click Next.

Step 6: Click Export. When you export these transactions to your ERP, we’ll create two journal entries. The first entry will post for the accrual to the current period, debiting the expense account you chose and crediting your respective accruals liability accounts. The second entry (the reversal entry) will post on the Auto reversal date you chose in Step 5. It will credit the expense account and debit your respective accruals liability accounts. Step 7: Once exported, you can only edit and re-post an accrued transaction in your dashboard on or after your chosen auto reversal date. On the auto reversal date, the transaction will auto reverse and reappear in Prepare. You can re-post it either as an actual or accrual by going through the Prepare > Review > Export workflow.

Expenses that can be accrued

You can accrue existing expenses from your accounting journal. When you use accruals, submitted reimbursements can also be exported in the accounting journal. Here is a summary of supported transactions:

Making changes to expenses

Employees can complete expenses, even after they’ve been prepared as accruals. If this happens while the transaction is Review, a blue dot will appear beside the transaction in the Accounting review table.

You can review and incorporate those changes by sending the transaction back to Prepare, which causes the transaction to automatically incorporate the employee changes. You can also export the prepared accruals without the employee changes, and the changes will be incorporated automatically when the accrual auto-reverses.

Posting period

The posting period for the accrual entry is determined by the ERP posting date, and the posting period for the auto-reversing journal entry is determined by the auto-reversal date. You can choose both when you export. If the posting period is closed, it defaults to the accounting preference set in the ERP. Auto-reversing journal entries are not created automatically for custom accounting.