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Exploring Accrual Accounting Workflows in Expensify

Jeremy BonifaceJeremy Boniface Expensify Team Posts: 136 Expensify Team

Every so often, Expensify needs input from our users when creating new features to help determine the best practices and most efficient workflows. Whenever we implement a new feature, our goal is to encourage adoption of these ideal practices by making them as easy as possible to adhere to. With this goal in mind, we're currently exploring what our users might want to see if we were to add an auto-accrual feature!

Here are some things we're wondering:

  1. Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)?
  2. What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient?
  3. Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?
  4. Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?
  5. How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close?
  6. If you process accruals before period close, would this ideally occur on the same date every month, or does it vary?

If there's any other context you want to provide not prompted by the above questions, feel free to include it -- any insight would be greatly appreciated!

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Thanks for the feedback everyone!

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Comments

  • tylerzolltylerzoll Approved! Accountant Posts: 430 Expensify Champion

    @Jeremy Boniface, I hope just copying and replying to your question here is okay. Here is my response:

    1. Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)?NetSuite & Yes, we use the future-dated auto-reversal for some things, but not currently expense reports.
    2. What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient?Unpaid incurred totals would be fine for me
    3. Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?Mostly just the higher expense accounts
    4. Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?One AP Account, but we could change that if it would work better
    5. How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close?Just monthly, can't imagine anything sooner would help
    6. If you process accruals before period close, would this ideally occur on the same date every month, or does it vary?Same date every month
  • AussiebanditAussiebandit Expensify Customer Posts: 256 Expensify Champion

    @Jeremy Boniface - here is our Company's response to your questions:

    1. Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? (1) Netsuite (2) Yes
    2. What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? - Line-item detail is necessary for accrual
    3. Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? - All categories
    4. Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? - We use a clearing account for accruals
    5. How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? - Before period close for all outstanding ones (unapproved, and unsubmitted)
  • Jeremy BonifaceJeremy Boniface Expensify Team Posts: 136 Expensify Team
  • tylerzolltylerzoll Approved! Accountant Posts: 430 Expensify Champion

    @Jeremy Boniface, I think I like @Aussiebandit 's answer to question number five more than mine. That would be really helpful to plug in an accrual for all unsubmitted reports.

  • DaveweezDaveweez Expensify Customer Posts: 146 Expensify Aficionado

    Agreed with the comments from Aussiebandit and Tylerzoll but we use Xero.

  • jonpepperjonpepper Expensify Customer Posts: 2 Expensify Newcomer

    Hi there -

    Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? Quickbooks online
    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? line item detail is important, including the employee name (so that we can figure the department). **
    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? **We like to reconcile our credit card liability at the end of the period to the statement. So, we accrue for all credit card transactions.

    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? We use clearing accounts
    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? monthly
    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? continually improving our processes, so it varies.

    Additional information: Getting people to do their expenses on time is a never-ending battle. So, my challenge with expense reporting softwares has been getting a complete list of all unapproved credit card transactions to accrue for. If the employee has submitted the expense for approval but it's not yet approved, I should be able to get expense category (e.g. if the employee bucketed it as 'meals expense') and the status of the expense (submitted but not approved).

    Further, once we have closed the books, the accounting software will not let expensify post transactions to that month. If an employee has an expense report approved in October for expenses dated in September, what happens? A helpful feature would be to have an option to close the books for September within Expensify. Once we close September period in Expensify, any transactions for September and prior would then be posted on the earliest open date (October 1).

  • Jeremy BonifaceJeremy Boniface Expensify Team Posts: 136 Expensify Team

    @jonpepper Thanks for joining the conversation! We're going to reach out via email to discuss the other topics you mentioned in your response!

  • acorneliusacornelius Expensify Customer Posts: 1 Expensify Newcomer
    edited October 2017

    Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? NetSuite and yes, we use the auto-reversal feature for our accruals.
    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? Line-item detail would be preferred.
    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? Airfare, lodging, and meals
    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? AP
    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? Before period close
    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? Around the same date every month but it is not exact

  • MSHFMSHF Expensify Customer Posts: 2 Expensify Newcomer

    Which accounting system are you using? NetSuite Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? Yes - we use future dated auto reverse on occasion, but not always.

    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? Line item detail would be preferable, and we'd need to have the information on who's expense report is being accrued for.

    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? We book for all categories, unless it would gross up both assets and liabilities (for example a prepaid expense in an expense report)

    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? We use an accrued expense account-would be nice if we could indicate which account we want used for the accrual.

    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? We only book accruals at monthend close, and we do not book accruals for assets (for example, if there is a 1000 airfare for January in December, we would not accrue a prepaid expense, so would need to delete line items from an export if it would be grossing up assets and liabilities

    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? NA for my company

  • MSHFMSHF Expensify Customer Posts: 2 Expensify Newcomer

    Also, would need to be able to determine the date the accrual is being booked - if a report is not complete or approved and is for a month closed, NetSuite will kick out an error if a JE is dated for a report for a period already closed.

  • mwgaussmwgauss Expensify Customer Posts: 1 Expensify Newcomer
    • Which accounting system are you using? ____MG: Xero & Quickbooks (subsidiary & parent, respectively) ____
    • Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? MG: Yes - future dated auto reversals
    • What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? ** MG: Sum of incurred totals by category; Would be a DREAM to have future dated travel information summarized by category & period. i.e. employees prepay for hotel and/or airfare that is for future travel....good to have this info on a summary basis to match to the appropriate recognition period. i.e. if we have a large conference that is in a later quarter we would want to match the associated travel with that period. I don't do this in current situation, but have in larger organizations where it is material. **
    • Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? MG: Material categories
    • Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? MG: One accrual account to handle general accruals or a separate travel accrual when large enough.
    • How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? MG: Depends on materiality and time involved. I've booked them monthly or quarterly depending on importance of cutoff and materiality.
    • If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? MG: N/A
  • ZowerZower Expensify Customer Posts: 1 Expensify Newcomer

    Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)?
    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient?

    • We use QB). Roll up of unpaid per GL would be sufficient for the time being.

    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?

    • Currently don't accrue due to the difficulty with Expensify & QBO.

    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?

    • Only A/P

    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close?

    • Period close

    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary?

    • N/A
  • stebrostebro Approved! Accountant Posts: 2 Expensify Newcomer
    1. Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)?
      - QuickBooks Online and Desktop: we either do nothing or manual journal entries.
    2. What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient?
      - A sum of unpaid totals would be a nice start. The more detail, the better so line item could be helpful, although somewhat inaccurate until a report is submitted and reviewed for approval
    3. Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?
      All categories
    4. Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?
      Clearing accounts
    5. How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close?
      Monthly
    6. If you process accruals before period close, would this ideally occur on the same date every month, or does it vary?
      Most likely when books close which varies by customer
  • YvonneRYvonneR Expensify Customer Posts: 1 Expensify Newcomer
    edited October 2017

    HI we use QBO. Our staff who enter their expenses in Expensify, and their supervisors who approve those expenses, are not financially savvy enough to understand accruals, so I wouldn't want to confuse them by giving them the option of choosing an accrual account for their expenses. Each expenses claim is auto-uploaded to QBO when it is approved, and I always check the JE that has been auto-generated and make any necessary adjustments.

    However if Expensify has an automatic accrual function based on the date of the receipt, and staff can't see this when they log or approve expenses, I would be interested in exploring this further.

    We book accruals and pre-payments monthly.

  • molliemollie Expensify Customer Posts: 5 Expensify Newcomer

    1) Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)?
    Sage Intacct. Auto-reversing entries.
    2) What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient?
    Sum of unpaid incurred totals per GL by department tag would be sufficient
    3) Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?
    We book accruals whenever the amount is material - over a certain dollar amount
    4) Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?
    Unsure
    5) How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close?
    just before period close
    6) If you process accruals before period close, would this ideally occur on the same date every month, or does it vary?
    date varies

  • LloydLloyd Expensify Customer Posts: 1 Expensify Newcomer

    I haven't read the all detail.

    Our accounting system is Xero.

    We use Expensify for employees reimbursable expenses and the company credit cards for non-reimbursable expenses.

    For accruals, at a chosen date it would be useful to total all open and processing reports and accrue for them through Xero's API integration.

    There should be two accruals reimbursable and non-reimbursable.

  • LeslieLeslie Expensify Customer Posts: 1 Expensify Newcomer

    Which accounting system are you using?**Intacct **

    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? line Item detail
    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?All categories
    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?we use auto reversing entries
    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close?Period close
    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary?It varies

  • goldfishjuliagoldfishjulia Expensify Customer Posts: 1 Expensify Newcomer
    Which accounting system are you using? **Sage Intacct.**
    

    Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)?** No.**
    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? Total per GL would be sufficient in most cases.
    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? Very few accruals.
    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? AP account.
    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? Monthly.
    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? Same date every month.

  • LesleyLesley Expensify Customer Posts: 2 Expensify Newcomer

    Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)?
    Sage Intacct
    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient?
    All detail would be better. If this feature were available, I would take an excel export from Expensify & turn it into a JE csv upload for Intacct. I'd manually review and sum by GL since sometimes we have employees making purchases for other departments.
    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?
    All but I don't usually have a lot of expense accruals because I do a lot of nagging around moth close.
    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?
    We use a clearing account.
    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? Monthly.
    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? We do not.

  • kwilliamsonkwilliamson Expensify Customer Posts: 1 Expensify Newcomer

    Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? NetSuite and Yes
    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? Summary level by GL and Department would be enough for us
    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? All categories
    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? One AP account
    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? Just before period close
    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? Accruals typically happen on day 2 or 3 of the close process, so roughly on the same day every month.

  • Faithhope21Faithhope21 Expensify Customer Posts: 1 Expensify Newcomer

    We use Quickbooks, I would say I would answer just as Jonpepper did to the questions.

  • areesarees Expensify Customer Posts: 1 Expensify Newcomer

    Which accounting system are you using? Netsuite
    Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? Yes, future dated auto reversal. Sometimes we use an amortization to allocate prepaid expenses.
    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? detail would be needed
    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? all accounts
    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? one Accrued Liabilities account
    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? just when we close our monthly books
    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? N/A

  • tiffany_tiffany_ Expensify Customer Posts: 2 Expensify Newcomer

    1) Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? Quickbooks Online. Yes.
    2) What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient?
    Currently, we require line-item detail. **
    3) Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?
    **All categories

    4) Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?
    A clearing account designated specifically for accruals
    5) How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close?
    Only for the monthly period close
    6) If you process accruals before period close, would this ideally occur on the same date every month, or does it vary?
    N/A

  • jimbeen2112jimbeen2112 Expensify Customer Posts: 1 Expensify Newcomer
    1. Which accounting system? Xero
    2. Native features? Yes, future-dated auto-reversal
    3. What level detail? Line-item detail. Honestly it's whatever amount of detail will help us remember why we accrued in the first place.
    4. Accruals for all categories or only high risk accounts? All categories
    5. Clearing account? No, we use a handful of accounts for expense reporting.
    6. Accrue how often? Before period close for all outstanding
  • Andrea_00Andrea_00 Expensify Customer Posts: 2 Expensify Newcomer

    Which accounting system are you using? Sage Intacct
    Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)?
    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? The more detail the better (merchant, date, amount
    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?All
    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?Yes
    How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close?Weekly would be nice
    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary?Month end, but that date varies depending on days in a month, when the weekend hits, etc.
    If there's any other context you want to provide not prompted by the above questions, feel free to include it -- any insight would be greatly appreciated!

    Additional insight on jonpepper's response I absolutely agree with, not allowing a date of September to be used once September is closed but automatically having it go to Oct 1 would be really helpful. **Also a streamline way to know what reimbursements are still outstanding like being able to filter and print a report by the confirmed date, not the date the reimbursement was initiated **

  • klandisklandis Expensify Customer Posts: 1 Expensify Newcomer
    1. Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? We use NetSuite for several different companies and use auto-reversals on our journal entries.
    2. What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? For the actual journal entry, we only need unpaid/unreported totals per GL account, but we do attach a spreadsheet with the line item detail showing how each expense was classified.
    3. Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? All categories.
    4. Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? We have an Accrued Expenses account separate from our AP account.
    5. How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close? Monthly.
    6. If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? N/A

    We would also like to see a report in Expensify that would allow us to quickly retrieve a list of expenses that are not yet posted to NetSuite (whether reported yet or not). The loading dock reports only give us "Unreported Expenses" or "All Expenses". We need something in between that includes the expenses that have been reported, but only if they are still pending approval or reimbursement.

  • erikaserikas Expensify Customer Posts: 1 Expensify Newcomer

    Thanks for asking for feedback.

    Which accounting system are you using? Quickbooks online

    Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)? Sometimes, but not much (yet).
    What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient? Line item and/or total by account code
    Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging? accurals for most categories that are material and we can reasonably predict something outstanding exists.
    Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting? couple different clearing accounts
    How often do you need to book your accrual entries? Monthly at most

    Would this be something you want totaled and booked daily, weekly, or just before period close? available on demand
    If you process accruals before period close, would this ideally occur on the same date every month, or does it vary? varies

  • pdaytonpdayton Expensify Customer Posts: 1 Expensify Newcomer
    1. Which accounting system are you using? Are you leveraging any native features on the accounting end to streamline the process (ie. future-dated auto-reversal)?
      NetSuite. We regularly use the amortization by line item feature on bills to generate the journal entries (and reversing ones) going forward.
    2. What level of detail do you need to effectively book your accruals? Would line-item detail (merchant, date, amount) be absolutely necessary, or would a sum of unpaid incurred totals per GL be sufficient?
      We need line-item detail.
    3. Do you typically book accruals for all categories, or only for high risk accounts, like Meals and Lodging?
      All categories.
    4. Do you use a clearing account for your accruals, or do you use one AP account to handle all expense reporting?
      We have an Accrued Expenses clearing account.
      Expensify can only post to one AP account for expense reporting per the NetSuite sync.
    5. How often do you need to book your accrual entries? Would this be something you want totaled and booked daily, weekly, or just before period close?
      We do it on demand. Reports can be run any day. I don't think we would want to have to wait to see the current accruals.
    6. If you process accruals before period close, would this ideally occur on the same date every month, or does it vary?
      Varies--see answer 5.
  • Marcia_LMarcia_L Expensify Customer Posts: 3 Expensify Newcomer

    Our situation is very similar to jonpepper's above. The issue with expenses from one month that are approved in the next month is an important issue for us as well.

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