Managing purchase accruals has been a difficult task in Microsoft dynamics though we have accrual scheme but that doesn’t provide better reporting and control over accrual schedule.
Now this has been resolved using the new module subscription billing and in this blog I am going to show you how we can manage purchase accruals in Invoice journal.
Lets start :
Scenario: Let’s say we but Insurance subscription for a year and now we create and post PO invoice, so system should post this in Prepaid account and create Accrual schedule or deferral schedule.
Expected accounting entry:
At the time of Invoice:
Prepaid Expense Insurance (Purchase accrual) Debit 12,000
Vendor Credit 12,000
Insurance expense Debit 12000/number of days in month
Prepaid Expense Insurance (Purchase accrual) Credit 12000/number of days in month
Define posting profile for schedule posting.
Create Invoice journal.
Apply and review deferrals.
Post and review Deferral schedule
Post month recognition and review
That’s it for this blog, hope this helps you in your project.
Thank you!!! Keep reading and sharing !!!