Differing accrual and cash timings

You may need to spread accrual values evenly over a number of months in the Profit and Loss report, while accounting for the cash payments or receipts on a different frequency (e.g. quarterly, six-monthly, or annually) in your Cashflow Forecast report.

You can do this by posting rules to your Profit and Loss and Balance Sheet sections.

 

 

To set up the accrual and cash entries in the profit and loss

  1. Within the forecast, open the Profit and Loss tab and locate the relevant account.
  2. In the yellow cells of the data grid, enter value(s) based on the cash timing you wish to see.
  3. Click Add Rule, then enter a name for the new rule.
  4. Set the Rule Type to Expense or Revenue, and from the 'Select Accounts to Apply Rule To' drop-down, choose the account you used in steps 2.
  5. In the 'Current Month' box enter 100%.
  6. Click Next, then click Save Rule.

This records the initial accrual values in the Profit & Loss, but more importantly it calculates the required amounts in the Cashflow Forecast tab.

 

To adjust the accrual entries and show monthly values

  1. Open the Balance Sheet tab, then open the Current Liabilities or Current Assets section.

    Note: If you worked with a Revenue account in the previous section, choose Current Liabilities. If you worked with an Expenses account, choose Current Assets.

  2. Click Add Account, enter a name for your new account, then click Save.
  3. Click Add Rule, then enter a name for the new rule.
  4. Set the Rule Type to Balance Sheet and from the 'Select Accounts to Apply Rule To' drop-down list, choose the account you created in step 2.
  5. From the Journal To drop-down list, choose the Revenue or Expense account to which you recorded the values earlier.
  6. Click Next, then enter the monthly values to spread the accrual values over the months of the profit and loss.

    Note: To debit the Balance Sheet, enter a positive value. To credit the balance sheet, enter a negative value.

  7. Click Next, then click Save Rule.

The Profit and Loss account now shows the values as monthly, while the Cashflow Forecast still reflects the values in line with the cash timing you wish to see.

 

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