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Post Info TOPIC: Accruals
Bernrob


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Accruals
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I can't get my head around this - we have invoiced our customers in October for an annual insurance   but not received our invoice until January.  My boss told me to accrue for it in the Oct, Nov, Dec management accounts.  i accrued the full amount at the end of every month and reversed it the following month .    When we received   the invoice I posted it as normal.  Do I now put it as a prepayment adjusting the figure on a monthly basis?

 

Thanks



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B M Roberts
Cheshire


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Hi Bernadette
Im a little confused by your post - you say you have invoiced your customer, but not received YOUR invoice.

Are you saying that you are re-charging the insurance to your clients? Isnt the re-charged based on thre previous January's insurance bill? How do you work out how to cover the full invoice or is it just an attempt to claw back all of your insurance costs so a random (ish) figure is passed on and you may make a loss or indeed a profit on it? 

(Im not even going to ask about VAT)

Perhaps some more meat on the bones of the question might help, although I suspect ifs its what Im thinking then you may just treat them as completely separate entries, independent of each other, although I think your boss may have it the wrong way round.

Also - I notice from a previous post that I responded to (further unresponded) from a few years ago that you are qualified with 20 years experience - more like 23 now obviously, but it would help for pitching answers to know what that experience and qualificatiomn consists of - can you expand a little please



Edited to correct some typos



-- Edited by Cheshire on Tuesday 13th of February 2018 06:12:36 PM

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Bernrob


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Hi

We are recharging a service for which we are invoiced on their behalf.

I have previously worked as a bookkeeper and always passed my accounts to a CIMA qualified accountant for them to prepare management accounts.  In this new job I'm having to do them myself and just need clarificationon the accruals.



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B M Roberts
Cheshire


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So - what business is your employer in that they are re-selling insurance? I take it they have a licence to sell insurance, before we go any further as their still isnt much meat on the bones of this question Im afraid.

Do they state 'insurance' on the invoice to your customers.

__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Bernrob


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All sorted thank you spoke to our accountants. yes we do have a licence.



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B M Roberts
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