Module Description

Through this module it is possible to generate accruals and deferrals during the invoicing phase of active and passive documents to detect the economic competence of costs and revenues.

Accrued income

Accrued income represents portions of income pertaining to the financial year to which the balance sheet refers, which will have financial manifestation in subsequent financial years.

Accrued liabilities

Accrued liabilities represent portions of costs pertaining to the financial year to which the balance sheet refers, which will have financial manifestation in subsequent financial years.

Accrued income

Prepaid expenses represent portions of costs that have had financial manifestation during the closing financial year or in previous financial years, but are pertinent to one or more subsequent financial years. They represent the portion of costs deferred to one or more subsequent financial years.

Accrued expenses

Deferred income represents portions of income that have had financial manifestation during the closing financial year or in previous financial years but are pertinent to one or more subsequent financial years. They represent the portion of income deferred to one or more subsequent financial years.

Setup

Setup Origins

In order to use the accruals module, you need to activate the following flags on the “Setup Origins” in the Application Areas tab:

• Simulate module active
• Activate accruals module 
  

The following fields are present in the accruals Setup tab:

• “Default Setup accruals”: indicate the default accruals setup code, which will be automatically proposed on documents and records.
• Allow accruals from: Indicate the date before which accruals are not allowed to be posted.

Allow accruals to: Indicate the date after which accruals are not allowed to be posted.

accruals Setup

In order to manage the registration of accruals in NBT Origins, it is necessary to set up the “ accruals Setup ”:

Within which the following parameters will need to be defined:

• Code : accruals setup identifier
• Description: explanatory of the previous field
• Type: option field that allows you to choose whether to record the accruals in general accounting or in simulated accounting
• General Accounting Reg. Def .: enter the default journal for CoGe/Simulated postings
• General Ledger Reg. Batch: enter the default batch for COGE/Simulate postings
• Accounting accounts
• Active accrual: it is used with supplier documents (invoices and credit notes) and in the journal with account to be discounted in Debit
  • Active discount : it is used with supplier documents (invoices and credit notes) and in the journal with the account to be discounted in Debit
  • Accrued liabilities: it is used with customer documents (invoices and credit notes) and in the journal with account to be discounted in Credit
  • Passive accrual: it is used with customer documents (invoices and credit notes) and in the journal with the account to be discounted in Credit
  • Invoices to receive
  • Invoices to be issued
• Days per Month : Indicates whether the calculation of the competences is based on the calendar year (actual days) or commercial year (30 days)
• Period type : option field from which you can select the recurrence method for the accruals (monthly, quarterly, half-yearly, yearly)
• Record entries: if active, the relevant entries are automatically posted by the system, otherwise the system inserts the lines in the batch indicated in the setup and the accounting must be done manually .
• Accrued liabilities as invoices to be received: to be activated if you want to record the accrual on the invoices to be received account
• Accrued assets as invoices to be issued: to be activated if you want to record the accrual on the invoices to be issued account

Functionality

accruals Management

Detection of accruals in active and passive documents

In sales/purchase documents (invoice, credit note, order, return order), the management of accruals is defined at the level of each individual document line.

To define the accrual period of a revenue/cost, the following fields must be filled in on the document line:

• accruals Setup : the accruals setup that you want to apply to the recording must be selected (see dedicated paragraph). This value is inherited from the Origins Setup and can be modified by the user if necessary.
• accruals Period: option field where you can establish the recurrence of the accruals calculation.
  • Monthly
  • Quarterly
  • Half-yearly
  • Annual
    This value is inherited from the Setup Origins and can optionally be changed by the user.
• Accrual start date: date from which the cost/revenue accrual starts
• Accrual end date: date on which the cost/revenue accrual ends

It is of course possible to set different periods and start dates for each document line.

However, within the same document, it is not possible to insert rows with different skill setups.

Once the movement has been posted, the navigate function will also display the movements of competence posted in CO.GE. or by feeding the simulated table. Please remember that the “Navigate” function applies a filter by document registration date, consequently to display all the movements generated by the competences it will be necessary to remove this filter in the simulated movements or co.ge.

Below is an example with a sales invoice document

• Registration Date 06/15/22
• CoGe account 6710, amount 300 Start date of accrual 01/05/22, End date of accrual 31/07/22

Case 1:

• Days per month = Actual days
• Invoices to be issued = Yes

The posted invoice generates the following movements:

Until 06/14/22 the account used is the one set as "invoices to be issued", from 06/15/22 instead the "passive deferred income" account is used.

Calculation details:

Case 2:

• Days per month = Actual days
• Invoices to be issued = No

The posted invoice generates the following movements:

Until 06/14/22 the account used is the one set as “accrued income”, from 06/15/22 the “deferred income” account is used instead.

Calculation details:

Case 3:

• Days per month = 30 days
• Invoices to be issued = Yes

The posted invoice generates the following movements:

Until 06/14/22 the account used is the one set as "invoices to be issued", from 06/15/22 instead the "passive deferred income" account is used.

Calculation details:

Case 4:

• Days per month = 30 days
• Invoices to be issued = No

The posted invoice generates the following movements:

Until 06/14/22 the account used is the one set as “accrued income”, from 06/15/22 the “deferred income” account is used instead.

Calculation details:

Detection of accruals in COGE records

In journal entries, accrual is defined at the level of each individual journal line.

To define the accrual period of a revenue/cost, the following fields must be filled in in the journal entry line:

• accruals Setup : the accruals setup that you want to apply to the recording must be selected (see dedicated paragraph). This value is inherited from the Origins Setup and can be modified by the user if necessary.
• accruals period: option field where you can establish the recurrence of the accruals calculation:
  • Monthly
  • Quarterly
  • Half-yearly
  • Annual
    This value is inherited from the Setup Origins and can optionally be changed by the user.
• Competence start date: date from which the cost/revenue competence starts
• Accrual end date: date on which the cost/revenue accrual ends

If multiple lines are used for the same registration, the fees must be entered only in the line in which they are to be calculated.

If the counterpart is also entered on the line, the system will calculate the fees only on the main account.

accruals register

Once the purchase/sales invoice registration or the journal entry has been completed, the “accruals Register” table is populated

In each line of the accruals register there will be evidence of the source document.

Using the “Open C/G or C/G Sim” function, it is possible to verify the relevant movements created simultaneously with the document registration. Depending on the registration choice (coge – simulated), the relevant table is opened:

Post-hoc accruals management

From the list of C/G Movements it is possible to calculate the competences a posteriori on documents already registered. This function is useful when the competences have not been entered on the document or have been entered incorrectly, paying close attention that the function does NOT delete any competence movements already detected previously.

By opening the list of movements you can modify the fields relating to the accruals:

Once you have entered the accruals information, you can launch the “Calculate accruals” function under the Process heading:

The system will generate the skill records based on the selected setup:

If automatic recording is not active in setup, it will be necessary to enter the accruals batch and record the entries.

Reversal/cancellation of fees

From the accruals register page you can:

• Reverse the accrual movements posted in the general ledger

Once the register has been cancelled/deleted, it will be possible to regenerate the accruals using the procedure described in the next paragraph.

The skill register line will be marked as “Reversed” and will not be visible in data extractions.

Regenerate accruals

This function allows you to regenerate accruals only for reversed skill movements.

From the accruals register page you can recalculate your accruals using the “Regenerate accruals” function:

The following screen will open in which to enter the new calculation parameters:

A new row with the new values will be created in the accruals register.

Calculate closing accruals

In the case of management of accruals in simulated accounting, for documents for which a skill “over” the fiscal year has been foreseen, a report has been prepared for the automatic generation of the following entries:

• Allocation of accrued expenses and deferrals in COGE at the end of the fiscal period analysed with a reduction in cost or revenue (final budget entry);
• Reversal of the previous entry in the simulation (since the accruals have already been allocated during the year with the entries accounted for at the time of registration of the original document);
• Recording of the cost or revenue in COGE with accruals or deferrals as a counterpart on the first day of the fiscal year following the fiscal period analyzed (final entry on the first of the following period). Note: therefore in official accounting on 01/01 after having also accounted for the opening entries of the balance sheets of the equity accounts, the balances of the accruals and deferrals will be = zero.
• Reversal of the previous entry in simulations (since the accruals have already been allocated during the year with the entries accounted for at the time of registration of the original document);

Using the search bar, open the “Calculate Closing accruals” page

You need to set the following fields:

• Ending date : date on which you want to generate the entries (in the example, closing entries will be generated with the registration date “31/12/22” and opening entries with the registration date “01/01/23”)
• The template and batch names on which the above described entries will be generated in CoGe and in simulated
• Generate simulated entries: if active, the simulated accounting batch is also generated, otherwise the entry is only made in CoGe
• Use custom description: if active, the movements are reported with the description set by the user in the field below. Otherwise, the description of the original simulated movement is reported.
• Custom description: description to be reported on the generated coge reg.