How to process Accrued Expenses

Modified on Mon, 11 May at 2:10 PM

Welcome to the help guide series for our Full Accounting product

Step 1: Set Up an "Accruals" Account Code

Navigate to Settings > Accounting > Account codes and click the Create Account button. Create a new account code called "Accruals" under the account type Other Creditors.

Step 2: Create a Bill for the Purchase

Navigate to Purchases > Bills and click the Create bill button. Fill out the new bill for your purchase—make sure to select Accrued Expenses (or the Accruals account you just created) as the account on the bill and add VAT as appropriate. Hit Save at the bottom to confirm.

Step 3: Post the Journal Entry

Navigate to Tools > Journals > All journals and click the Create journal button. Create a journal to Dr (Debit) the relevant Expense account on the P&L and Cr (Credit) Accrued Expenses on the Balance Sheet. Click Post journal to complete.

Alternative Option: Instead of a single journal entry, you can set up a recurring journal to easily spread the cost over a period of time.