Accruals

[Former Member]

Hi,

Would you please describ what is the accrual process?

I have one example. Like I m paying rent for the year in advance for 12 month on 1st Jan. How I will post entry in sap?what will be my month end process for the same?

like on 1st jan:

F-53 paying to vendor 12000

now what entry we will post as accrual entry? which t code we will use? how much amount we will post/reverse?

Kindly provide details for paying usd 12000 for whole year and then how we will do in sap?

Regards,

Pankaj

[former_member380737 · Accepted solution]

As per your scenario this falls under the category of Prepaid rent. It should first go to prepaid account and gets adjusted every month. FBS1 is the T Code to post accruals in SAP. An example of accrual is that you didn't receive the electricity bill for the month of January then you need to post an accrual entry in Jan for this expense. In the absence of the bill you can post an accrual which you can reverse next month to set off the entry and have correct financials at period level. Hope this helps.

[chandrasekharbadeti_chand · Accepted solution]

Hi

Accruals entries will be created for Payables. like Salaries/Telephone/Electricity/Rent/Agency Commissions/Discounts for the month January will be paid in the month of February. Suppose if you are drawing Financial Statements at the January month end then you can use Accrual Entries which will be reversed in the 1st date of next month February. the same processs is for Receivables known as Deferral Entries.

To Create Accrual/Defferal Documents use T Code: FBS1 - Enter Accrual/Deferral Document

To Reverse Accrual/Defferal Documents use T Code:F.81 - Reverse Accrual/Deferral Document

What ever scenario you have asked in the SDN Form is related to Down Payments (Advance Payments) which is a Special GL Transactions for which you have to configure Special GL Configuration settings for Downpayments Made. this is a separate business process apart from Accruals and Deferrals concept.

Thanks & Regards,

Chandra

[Former Member · Accepted solution]

Hi,

Thanks a lot for this reply. I think i m now getting on to the meaning.

can you please explain me with example; like we are paying Phone bill once a three month. let say we pay 3000 usd phone bill in Mar End for Jan-Mar. how we will show this in sap for all three months. what entry/processes do we need to run in sap every month? kindly explain with accounting entry.

Regards,

Pankaj

[Former Member · Accepted solution]

Ist Month:

Vendor Cr 3000

Expense Rent (G/L) Dr 1000

Prepaid Rent (G/L) Dr 2000

2nd Month:

Expense Rent (G/L) Dr 1000

Prepaid Rent (G/L) Cr 1000

3rd Month:

Expense Rent (G/L) Dr 1000

Prepaid Rent (G/L) Cr 1000

[Former Member · Accepted solution]

Hi,

thanks for the reply.

can you please eloberate more this above example, like in the first month you did following entry,

Ist Month:

Vendor Cr 3000

Expense Rent (G/L) Dr 1000

Prepaid Rent (G/L) Dr 2000

Here actually we have not paid to vendor, but we need to show in system to get the correct picture.right? so how we will post this entry in SAP, with which t code? when we will reverse this entry, as this is not real, with which t code?

kindly explain the above for all three months?

Thanks & Many regards,

Pankaj

[Former Member · Accepted solution]

Hi.Income and expenditure is recognized when it is earned or incurred and not when cash is received or paid.It's accrual basic.

In your case Accrued expense(Expense incurred but not invoiced/paid). and it's better to calculate by average amount and allocate it till months( 3000/3=1000). So every month you'd to do next posting

(Periodic posting) 31.01 Dr P&L a/c 1000

Cr Phone a/c

On 01.02 you'd to reverse one.

Sometimes you can make Opening and Closing posting

Opening posting Dr Clearing a/c 3000

Cr Phone a/c 3000 and then periodic posting.

There are two functionality of accruals. One as described BCSJVS ChnadraBS. And another(more flexible) create Accruals object ACACTREE01, and run periodic posting ACACACT. Also using ACACTREE01 you can simulate values.