Accrual schedules

Accruals can be posted to an accrual plan through two different methods. The most common method is through actual sales or purchase transactions. For example, a sales rebate set up for a particular customer and item accrues an amount when a sales order is entered for that customer and item, which is then posted to the accrual plan.

You can also accrue predetermined amounts to an accrual plan according to a defined schedule. This can be preferable in situations where actual transaction information is not known. For example, you might have a marketing program with a company that resells your items, where for every one of your items they sell, you will accrue and ultimately pay back a predetermined amount. Because there is no way to directly enter actual transaction information as it occurs, set up an accrual schedule to accrue amounts over a specified period of time.

Estimated accrual amounts

Determine an estimated accrual amount for a particular accrual plan. Calculate an accrual estimate from two sources:

1. When an item is entered on an accrual plan line, enter an estimated quantity as well. The program determines an estimated accrual amount by using the accrual calculation method defined for the item. For example, if you assign an item to an accrual plan with an accrual calculation method of $0.50 per unit sold and an estimated quantity of 1,000 units, the program calculates an estimated accrual amount of $500 for that item.
2. Assign accrual charges to an accrual plan. Accrual charges represent additional costs you want to associate with an accrual plan. If you create an accrual plan for a sales rebate program, you might have accrual charges for different types of marketing expenses and promotions tied to that program.

The sum of an accrual plan's estimated accrual amounts from accrual lines and accrual charges is the accrual plan's total estimated accrual amount.

Accrual schedules

Set up an accrual schedule for a specific accrual plan. While you can manually enter the date and amount for each accrual in a schedule, it may be easier to instruct the program to automatically generate an accrual schedule based on an accrual plan's total estimated accrual amount.

When you indicate that you want to use an accrual schedule for an accrual plan, that plan's accrual posting level changes from the default document line setting. You cannot post accruals based on actual transactions to an accrual plan if the plan has an active accrual schedule.

Payments

You can also set up a payment schedule for an accrual plan. As with accrual schedules, base a payment schedule on an accrual plan's total estimated accrual amount.

You do not have to create a payment schedule for an accrual plan with a defined accrual schedule. You may want to manually distribute payments from a scheduled accrual amount. In addition, payments are sometimes taken against an accrual plan in the form of deductions.

Reconciliation

When accruals are based on actual transactions, the accrual amounts posted to that plan are accurate. This may not be true when accruals are based on a defined accrual schedule. For example, you might create an accrual schedule based on an estimate that 1,000 units of an item will be sold. When the marketing program is over, you discover that 1,100 units were sold.

In the general journal, enter a line for a specific accrual plan account as well as a balancing account. In this way, make a direct posting to an accrual plan to adjust the total accrual amount for a particular plan.

You can also use the general journal to make adjustments to the payment amount for an accrual.