A “Recurring Journal” is a journal that needs to be repeated and processed periodically. Recurring Entries are business transactions that are repeated regularly, such as fixed rent or insurance to be paid every month. Learn the various methods that can be used to generate recurring journals. See some examples and explore the generic process to create recurring journals in any automated system.
A “Recurring Journal” is a journal that needs to be repeated and processed periodically. Recurring Entries are business transactions that are repeated regularly, such as fixed rent or insurance to be paid every month. Each accounting period the journal should have the same accounts but the amounts could be different. A recurring journal entry enables you to automate similar or repeating entries. For users who need to post certain transactions frequently with few or no changes, it is an advantage to use recurring journals.
Recurring entries allow for common repeatable transactions to be saved in a template and created in multiple accounting periods upon request, making it unnecessary to retype the entire transaction thereby improving productivity. The Auto-generation of recurring accounting entries minimizes the occurrence of errors and omissions. Systems allow the generation of recurring entries at weekly, monthly, or any other frequency.
Needs to be entered periodically
The same set of accounts are included every period
The same number of Journal Lines
Logic exists to define the line selection criteria
Simplifies the process of recording repetitive journal entries
Creates same journal entries with varying or same amounts in different accounting periods
This is useful when the same accounts need to be used every period however the amounts get changed every time. In this scenario, the template is defined with no amounts, and amounts are entered manually every accounting period for which the entry needs to be generated.
This is useful when both accounts and amounts can be pre-determined. A good example of this scenario is fixed rent payable each month on a specific date. In this case, the template is defined with actual amounts, and journals are created and posted for relevant accounting periods.
This is useful when accounts can be pre-determined and amounts will be based on some logic or pre-defined formula. A good example of this scenario could be defining salesmen accounts as the pre-determined accounts. The commission is to be paid to these salesmen as a fixed percentage of sales made by each salesman during the month and sales for each salesman are recorded in separate accounts. A recurring journal can be defined that can look for the balance in respective sales accounts at the end of the period and automatically calculate the commission and create the required accounting entry for commission payable.
This method works best for repeatable transactions. For example annual expenses that can be charged through twelve equal monthly entries such as, rent or insurance expense allocation or annual lease rentals. Each month 1/12th of the total annual expense can be debited and credited to the appropriate accounts and appear as the current month’s actual transaction. Users can benefit by creating a recurring entry for some of the business scenarios listed below:
Users need to define recurring journal formulas for transactions that they want to repeat every accounting period, such as accruals, depreciation charges, and allocations. The formulas can be simple or complex but need to have some logic of ascertaining the amounts for each of the accounts that need to be repeated. Each formula can use fixed amounts and/or account balances and period-to-date or year-to-date balances from the current period, prior period, or same period last year. Given below is a generic process flow to define recurring journals:
Recurring Journals are for transactions that repeat every accounting period as explained above and allocation Journals are for single journal entry using an accounting or mathematical formula to allocate revenues and expenses across a group of accounting dimensions like cost centers, departments, divisions, locations, or product lines depending upon usage factors.
Shared Services is the centralization of service offering at one part of an organization or group sharing funding and resourcing. The providing department effectively becomes an internal service provider. The key is the idea of 'sharing' within an organization or group.
In this article we will help you understand the double-entry accounting system and state the accounting equation and define each element of the equation. Then we will describe and illustrate how business transactions can be recorded in terms of the resulting change in the elements of the accounting equation.
GL - Recurring Journal Entries
A “Recurring Journal” is a journal that needs to be repeated and processed periodically. Recurring Entries are business transactions that are repeated regularly, such as fixed rent or insurance to be paid every month. Learn the various methods that can be used to generate recurring journals. See some examples and explore the generic process to create recurring journals in any automated system.
Defining Organizational Hierarchies
A hierarchy is an ordered series of related objects. You can relate hierarchy with “pyramid” - where each step of the pyramid is subordinate to the one above it. One can use drill up or down to perform multi-dimensional analysis with a hierarchy. Multi-dimensional analysis uses dimension objects organized in a meaningful order and allows users to observe data from various viewpoints.
Introduction to Organizational Structures
Organizations are systems of some interacting components. Levitt (1965) sets out a basic framework for understanding organizations. This framework emphasizes four major internal components such as: task, people, technology, and structure. The task of the organization is its mission, purpose or goal for existence. The people are the human resources of the organization.
Prepayments and Prepaid Expenses
Prepayments are the payment of a bill, operating expense, or non-operating expense that settle an account before it becomes due. Learn the concept of prepaid expenses. Understand the accounting treatment for prepaid expenses. Understand the concept by looking at some practical examples and finally learn the adjusting entry for these expenses.
When the quantum of business is expected to be moderate and the entrepreneur desires that the risk involved in the operation be shared, he or she may prefer a partnership. A partnership comes into existence when two or more persons agree to share the profits of a business, which they run together.
A Company (also called corporation) may be understood as an association of persons in which money is contributed by them, to carry on some business or undertaking. Persons who contribute the money are called the shareholders or the members of the company. A corporation is an artificial being, invisible, intangible and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it.
Multi Currency - Functional & Foriegn
Currency is the generally accepted form of money that is issued by a government and circulated within an economy. Accountants use different terms in the context of currency such as functional currency, accounting currency, foreign currency, and transactional currency. Are they the same or different and why we have so many terms? Read this article to learn currency concepts.
What is a Business Eco System?
The goal of a business is to generate capital appreciation and profits for its owners or stakeholders by engaging in provision of goods and services to customers within the eco system/framework governed by respective laws(local/international). The eco system involves various entities that the business works with for delivery of a product or service.
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