We are now in month 10 of our accounting year and I am looking at forecasting full year figures as all sales orders we have that can be deilvered by year end are in now and pretty much finalised.
I have also spotted two items of travel expenditure that will be moved into the next accounting year as they relate to air tickets and pre-paid hotel accomodation for a trade fair in November in Hong Kong, so was wondering if there is any "best practice" or other reason why I cannot move these to 1st June 2011 now so they don't appear in P&L figures, or should this be left until after 1st June?
Of course it is ok to do it during the year, and in fact to get the best management information it is recommended to do so. Sometimes these things are better dealt with at the time in exactly the way Nick has explained.
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Just a thought Ridesy, but it is good practice in general to make these adjustments on a monthly basis - especially of you have a lot of prepayments/accruals/deferred income etc.
Otherwise if you are providing monthly management accounts, month 12 may look a bit strange!
It is a good idea to fill in journal templates for each period and also keep a schedule on excel or similar to track the prepayments/accruals workings.
So I agree with previous responses it can be done now....although the travel expenses should really have been moved at the time of receipt so that they never appear in the P&L until the correct period.
Apologies for hijacking the thread, but my question is on a similar vein....
Is it recommended to post Accrualss each month and reverse them the next when there is a cost that you're accruing over say 6mths thus increasing the amount accrued each month or is it acceptable to accrue an amount each month and reverse the total accrued on receipt of invoice.
For example, Water rates, received twice a year, is it ok to accrue £20pm and then at month six on receipt of the invoice reverse the £120 and process the purchase invoice, or should I accrue £20, reverse £20 at the start of month 2, accrue £40 at end of month 2, reverse £40 at start of month 3, accrue £60 at end of month 3 etc
