Are you a Staff Accountant or a Finance Manager responsible for financial close procedures? Are you currently recording numerous accruals and reversals throughout the financial close process? Do you have specific accruals & reversals that are done on a routine basis? Read on to learn more about recurring journals for reversing entries in Dynamics 365 Business Central!
For most finance & accounting professionals, a typical financial close process includes reversing accruals from the previous financial close and booking entries for actual expenses, as well as booking new accruals for expenses in-flight. An example of common accruals & reversals might be a payroll accrual for a payroll period that spans month-end, which needs to be booked at the end of the current financial period for payroll fees that will be paid out during the next financial period. As of the current financial close, an accrual entry needs to be booked; however, following the completion of the current financial close (or prior to the completion of the next financial close) the accrual must be reversed and the actual expense recorded.
The following blog post is written to provide two key tips:
- How to create a recurring journal to save time & reduce errors
- How to create a reversing recurring journal: journal entries that automatically create reversing entry for the next day
Navigating to the Recurring Journals
To access the recurring general journals, select the magnifying glass, and enter Recurring General Journals in the search bar. Select the appropriate link to open the recurring journals.
Select the three dots next to the batch name to open the batch list.
Select the desired batch and press OK, or create a new batch by selecting New.
Creating Reversing Journal Lines
- Recurring Method: If a reversing variable recurring method is chosen, the amount field will be deleted after posting. If a reversing fixed recurring method is chosen, the amount field will remain the same.
- Recurring Frequency: The chosen value in this field will update the Posting Date accordingly after the journal has been posted. The value 1D+CM will advance the posting date to the last day of the next month upon posting (for example, if you post on February 28th, the posting date will advance to March 31st).
- Document No.: The document number in the recurring journal can contain a time period name that will be updated upon journal posting.
Posting Journal Entries
When line entries are complete, select Post to record the transactions on the general ledger.
In this example, observe the changes to the Posting Date and Amount fields upon posting. The recurring journal is set up for the next recording period with minimal data entry required.
The general ledger reflects the reversing entry as shown below.
The ability to leverage recurring journals to post an accrual & reversal allows Staff Accountants and Finance Professionals the opportunity to leverage the system to manage monthly work. As many Business Central users find they have a variety of accruals & reversals to book each month, leveraging the recurring journal is a great way to work smart. If you’d like to learn more about Business Central please contact us. Happy financial close!