Accruals for expenses

Overview

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Accounting teams spend a lot of time chasing down employee expense compliance at month's end. Instead of the chase, book those expenses as accruals and revisit them in the following month when they are compliant. With accruals, you can prepare and export card and reimbursement expenses as accruals instead of actuals, even if they aren’t yet compliant. We’ll post the accrual and inform the ERP to create the corresponding reversing journal automatically. Accruals are exported as journal entries to your ERP. When you export an expense as an actual, we use your currently configured ERP export type for posting. Make sure your Card accruals liability and Reimbursement accruals liability accounts are set up in Integration settings. If you have multiple entities, go to Integration settings > Entity settings to set up these GL accounts for each entity. Note: The accruals feature is only available for NetSuite, Quickbooks Online, Sage Intacct, Oracle Fusion, Workday, and Custom Accounting users.

Prepare and export expenses as accruals

To post accruals and schedule auto-reversals, follow these steps:

Step 1: Go to Accounting > Prepare. Step 2: Select the transactions you want to post as accruals and click Prepare as accrual. These transactions will be moved to Review, with an Accrual status in the Prepared as column. Step 3: Go to Review and confirm that the transactions are correctly categorized. Step 4: Select the transactions you want to export as accruals and click Export to open the details window. Step 5: Choose an appropriate auto-reversal date for your accruals, select your Export type, and click Next.

Step 6: Click Export. When you export these transactions to your ERP, Brex creates two journal entries:

• Accrual entry: Posts to your ERP based on your ERP Posting Date. This debits the expense account you chose and credits your accruals liability account.
• Reversal entry: Automatically posts to your ERP on the Auto Reversal date you set in Step 5. Unlike the first entry, this does not require running the export flow in the Brex dashboard. It reverses your initial accrual by crediting the corresponding expense account and debiting the corresponding accruals liability account.

Step 7: You can re-post an accrued transaction on or after your chosen Auto Reversal date. On that date, the reversal posts automatically in your ERP and the original transaction in Brex reappears in Prepare. At this time, you can re-evaluate the expense and select the appropriate workflow:

• Export as an actual if documentation and compliance tasks are complete.
• Export as an accrual again if documentation and compliance are still outstanding, and you want to give your users more time to complete them.

Expenses that can be accrued

You can accrue existing expenses from your accounting journal. When you use accruals, submitted reimbursements can also be exported in the accounting journal. Here is a summary of supported transactions:

Making changes to expenses

Employees can complete expenses, even after they’ve been prepared as accruals. If this happens while the transaction is Review, a blue dot will appear beside the transaction in the Accounting review table.

You can review and incorporate those changes by sending the transaction back to Prepare, which causes the transaction to automatically incorporate the employee changes. You can also export the prepared accruals without the employee changes, and the changes will be incorporated automatically when the accrual auto-reverses.

Posting period

The posting period for the accrual entry is determined by the ERP posting date, and the posting period for the auto-reversing journal entry is determined by the auto-reversal date. You can choose both when you export. If the posting period is closed, it defaults to the accounting preference set in the ERP. Auto-reversing journal entries are not created automatically for custom accounting.