Most companies have a need for some minimal level of deferrals and accruals. This could be insurance prepaid for the year that needs to be expensed over 12 months. It could be prepaid revenue that is earned in the first half of the year but not billable until year end or any number of similar transactions. For straightforward accruals and deferrals Dynamics GP's recurring batch functionality can be used to manage, track, and post these types of transactions. In this recipe, we'll look at how to set up and process accruals and deferrals using recurring batches.
For our example, assume that corporate insurance is due and paid on January 1, and the payment covers January through December of that year. For simplicity sake, corporate insurance is $12,000 a year and the company is going to recognize $1,000 per month until the full amount is used up.
The payables transaction for $12,000 debited Prepaid Expenses, a balance...