Accruals

Original Entry

Let's use the following as an example: the table displays the transaction entry lines for a payroll check. This check is for the amount of $0.04 and needs to have an accrual applied to it. For simplicity, GL is the only segment included in the following example.

Table A
GL	Type	DR	CR	Entry Type	Effective Date	Description
11000	CSH		0.04	Normal	11/3/2022	Cash
50003	EXP	0.04		Normal	11/3/2022	Bonus Exp

Prior to Transferring or Pre-transferring data to Accounting, you must have:

• Entered timesheets (Payroll > Processing > Employee Timesheets)
• Printed and reviewed timesheets
• Calculated Payroll (Payroll > Processing>Process Payroll > Select Processing Groups, then calculate the payroll)
• Set up an accrual account (As the Administrator, go to Administration > Organization > Organization Settings > Module Setup > Payroll), and
• Printed checks and/or vouchers (Payroll > Processing > Process Payroll > Print Checks and Vouchers).

Transfer to Accounting Table

Now, we need to transfer the check to Accounting. The following table displays the processing group code for the check. Note that the amount of $0.04 needs to be split between the accrual (20%) and check (80%).

Table B
	Group Code	Pay Date	Check Date	Check %	Accrual Date	Accrual %
	Admin	11/03/22	11/03/22	080.0000	10/31/22	020.0000

Accrual Entry

Now, apply the 20/80 percentages from Table B. After completing the Transfer to Accounting form, click the Pre-Transfer or Transfer buttons to generate accruals. During the generation of accrual entries, the system uses the original entry (Table A), and splits it into separate entries as shown in the table below:

1. The system takes each line of the original entry and distributes it to the Accrual % first, then the Check % (see the table below). You entered these percentages on the Transfer to Accounting form (Table B).

The accrual distribution is calculated by multiplying $0.04 by 20%. Similarly, the check distribution is calculated by multiplying $0.04 by 80%. Note that the system rounds the credits and debits. See Rounding Accruals for more information.

GL	Type	DR	CR	Effective Date	Description
11000	CSH		0.01	10/31/22	Accrual Distribution
11000	CSH		0.03	11/03/22	Check Distribution
50003	EXP	0.01		10/31/22	Accrual Distribution
50003	EXP	0.03		11/03/22	Check Distribution

2. Next, the system replaces the Cash (CSH) transaction lines of the original entry with the Accrual payable account (such as APO and OL) that the Administrator designated in Administration>Organization>Organization Settings>Module Setup>Payroll. Now you have two entries to accounting—one for the accrual date and one for the check date, both of which are found in Table B. The cash account is temporarily removed from the calculation in this step; however, it is added back in the next step.

GL	Type	DR	CR	Effective Date
11000 21001	CSH OL		0.01	10/31/22
11000 21001	CSH OL		0.03	11/03/22
50003	EXP	0.01		10/31/22
50003	EXP	0.03		11/03/22

3. Add the original Cash transaction lines from the original entry (row 1 in Table A). Then, add another transaction line by reversing the cash entry and changing it to the accrual account. Both lines use the Check Date from Table B.

	GL	Type	DR	CR	Effective Date
Add	11000	CSH		0.04	11/03/22
Rev	21001	OL	0.04		11/03/22
	21001	OL		0.01	10/31/22
	21001	OL		0.03	11/03/22
	50003	EXP	0.01		10/31/22
	50003	EXP	0.03		11/03/22

4. The last step is to combine all transaction lines that have the same GL Code and Effective Date. You need to net all current accrual entries (OL) with the same effective date into a single entry with a debit of $0.01.

	GL	Type	DR	CR	Effective Date
	11000	CSH		0.04	11/03/22
	21001	OL		0.01	10/31/22
Combine	21001	OL	0.04		11/03/22
Combine	21001	OL		0.03	11/03/22
	50003	EXP	0.01		10/31/22
	50003	EXP	0.03		11/03/22

5. Your final entry looks like the following table:

GL	Type	DR	CR	Effective Date
11000	CSH		0.04	11/03/22
21001	OL		0.01	10/31/22
21001	OL	0.01		11/03/22
50003	EXP	0.01		10/31/22
50003	EXP	0.03		11/03/22

Distributions are made to the Accrual % first, then the Check %. (See Using Accruals for more information.) Consequently, if the Accrual % is less than 50%, any cent adjustments are going to be distributed to the Check % transactions. As you can see from the following examples, the amount could vary slightly due to numbers being rounded by certain percentages. These examples are based on US Currency.

10% Accrual

For an accrual of 10%, there would be no accrual amount because 10% of $0.04 is $0.004, which rounds down to $0.00.

GL	Type	DR	CR	Effective Date	Description
11000	CSH		0.04	11/3/22	Cash
50003	EXP	0.04		11/3/22	Bonus Exp

20% Accrual

For an accrual of 20%, there would be an accrual amount of $0.01 because 20% of $0.04 is $0.008, which rounds up $0.01.

GL	Type	DR	CR	Effective Date	Description
21001	OL		0.01	10/31/22	Accrual Exp
50003	EXP	0.01		10/31/22	Bonus Exp
21001	OL	0.01		11/03/22	Accrual Exp
50003	EXP	0.03		11/03/22	Bonus Exp
11000	CSH		0.04	11/03/22	Cash

30% Accrual

For an accrual of 30%, there would be an accrual amount of $0.01 because 30% of $0.04 is $0.012, which rounds down to $0.01.

GL	Type	DR	CR	Effective Date	Description
21001	OL		0.01	10/31/22	Accrual Exp
50003	EXP	0.01		10/31/22	Bonus Exp
21001	OL	0.01		11/03/22	Accrual Exp
50003	EXP	0.03		11/03/22	Bonus Exp
11000	CSH		0.04	11/03/22	Cash

40% Accrual

For an accrual of 40%, there would be an accrual amount of $0.02 because 40% of $0.04 is $0.016, which rounds up to $0.02.

GL	Type	DR	CR	Effective Date	Description
21001	OL		0.02	10/31/22	Accrual Exp
50003	EXP	0.02		10/31/22	Bonus Exp
21001	OL	0.02		11/03/22	Accrual Exp
50003	EXP	0.02		11/03/22	Bonus Exp
11000	CSH		0.04	11/03/22	Cash

50% Accrual

For an accrual of 50%, there would be an accrual amount of $0.02 because 50% of $0.04 is $0.02.

GL	Type	DR	CR	Effective Date	Description
21001	OL		0.02	10/31/22	Accrual Exp
50003	EXP	0.02		10/31/22	Bonus Exp
21001	OL	0.02		11/03/22	Accrual Exp
50003	EXP	0.02		11/03/22	Bonus Exp
11000	CSH		0.04	11/03/22	Cash

60% Accrual

For an accrual of 60%, there would be an accrual amount of $0.02 because 60% of $0.04 is $0.024, which rounds down to $0.02.

GL	Type	DR	CR	Effective Date	Description
21001	OL		0.02	10/31/22	Accrual Exp
50003	EXP	0.02		10/31/22	Bonus Exp
21001	OL	0.02		11/03/22	Accrual Exp
50003	EXP	0.02		11/03/22	Bonus Exp
11000	CSH		0.04	11/03/22	Cash

70% Accrual

For an accrual of 70%, there would be an accrual amount of $0.03 because 70% of $0.04 is $0.028, which rounds up to $0.03.

GL	Type	DR	CR	Effective Date	Description
21001	OL		0.03	10/31/22	Accrual Exp
50003	EXP	0.03		10/31/22	Bonus Exp
21001	OL	0.03		11/03/22	Accrual Exp
50003	EXP	0.01		11/03/22	Bonus Exp
11000	CSH		0.04	11/03/22	Cash

80% Accrual

For an accrual of 80%, there would be an accrual amount of $0.03 because 80% of $0.04 is $0.032, which rounds to $0.03.

GL	Type	DR	CR	Effective Date	Description
21001	OL		0.03	10/31/22	Accrual Exp
50003	EXP	0.03		10/31/22	Bonus Exp
21001	OL	0.03		11/03/22	Accrual Exp
50003	EXP	0.01		11/03/22	Bonus Exp
11000	CSH		0.04	11/03/22	Cash

90% Accrual

For an accrual of 90%, there would be an accrual amount of $0.04 because 90% of $0.04 is $0.036, which rounds to $0.04. There would be no check amount because 10% of $0.04, rounded down, would be $0.00.

GL	Type	DR	CR	Effective Date	Description
21001	OL		0.04	10/31/22	Accrual Exp
50003	EXP	0.04		10/31/22	Bonus Exp
21001	OL	0.04		11/03/22	Accrual Exp
11000	CSH		0.04	11/03/22	Cash

Suppose that we want to accrue checks using all nine examples. Keep in mind, the accrual is based on $0.04 (US Dollars).

Notice that the Accrual Amounts must be adjusted up or down to accommodate for rounding. Using this example, you can see how debits and credits could get out of balance. If debits do not equal credits, the system adjusts them to get the transactions back to a balanced amount for Effective Date, Fund, Pay Type, and balancing segments.

Ex.	Accrual %	Accrual Amount (.04 * %)	Round	Amount Used
1	10	0.004	Down	0.00
2	20	0.008	Up	0.01
3	30	0.0120	Down	0.01
4	40	0.0160	Up	0.02
5	50	0.0200	--	0.02
6	60	0.0240	Down	0.02
7	70	0.0280	Up	0.03
8	80	0.0320	Down	0.03
9	90	0.0360	Up	0.04

Note: If you have more entries rounding up or more rounding down, the system has to make greater adjustments in order to balance debit and credit amounts. See Rounding Accruals for more information.