IMOS - Monthly Accruals

 This is a Key Topic, with high value for all users.

The purpose of closing accruals is to keep as accurate as possible a picture of the revenues and expenses of open voyages. Companies perform accruals at different intervals during the year; in most cases, it is monthly.

With Monthly Accruals, you can compute the posted-actual for every vessel voyage that is still open and calculate accruals based on the result.

With the Modify P&L Calculation Options Module Right selected in IMOS Security, you can toggle the P&L Calculation Options in the top right corner of this form. Without it, you can only use this form with the P&L Options as set by the configuration flags beginning with CFGDefaultPnlCalc.

Required Setup

Before running monthly accruals, the following setup is required to achieve accurate results:

• Complete your Chart of Accounts.
• Determine if you will be using Accrual By Ops or Accrual By Act.
• Complete your Accrual Business Rules.
• Set your accrual basis: always prorate or using an operations basis date (CFGVoyaccAccrualDate).

Calculating Accruals

1. In the Financials module center , under Period Closing, click Monthly Accruals.
   
2. Select the accruals Basis:
   • Recalculation
   • Daily Snapshot: Specify the snapshot Type and, for noncurrent snapshots, specify the Date. For journals created using this method, the Invoice Date and Accounting Date are the same as the Accruals Year/Month on this form.
     • Accruals snapshots appear in the Snapshot and Period Comparison selection lists on the P&L tab of the Voyage Manager.
     • To accurately account for these items based on your company's policies, the following Calculation Options can be used with accruals-based snapshots created with IMOS v7.10 or later: Apply Additional Hire to Period, Apply TC Bunker Adjustment to Period, Apply TC Expenses to Period, Apply Other Revenues/Expenses to Period, Apply Port Expenses to Period.
3. Select filters to limit accruals by Trade Area, Company/LOB, Vessel Fleet, Vessel Type, Operation Type, or Pool, or select a specific Vessel.
4. Select Lower Bound Date and Lower Value Limit filters.
5. To apply P&L calculation options, select the appropriate check boxes.
6. Click .
7. To select the records you want to post, select their check boxes in the S column, at the right, or select the Select All check box.
   • To take and save a P&L snapshot for every result line, regardless of whether there are accrual items, select the Save Snapshots for All check box.
   • To view a record in the Bill Viewer, including the details to be included in the Journal, right-click the line and then click Preview Journal.
8. To select the records for which you do not want to create a reversal of the accrual, clear their check boxes in the R column.
9. Click .
   • If a record's S check box is selected, a Journal Entry is generated with two lines, one for accrued revenue, and one for accrued expense. The accrual transaction is generated on the last date of the accounting period (typically the end of the month). 
   • If a record's R check box is selected, a reversal of the accrual is generated for the first day of the next month.
10. To view Summary or Account Analysis reports, click .

Calculation Method for Accruals (Revenue and Costs)

Accrual journals are generated on a per vessel, per voyage basis. The system calculates month-end results.

• With configuration flag CFGActAccrualBreakdown set to:
  • Y: The calculation is per P&L category.
  • N: P&L categories are consolidated into revenues and expenses.
• With configuration flag CFGVoyaccAlwaysProrate set to:
  • Y: P&L results are prorated according to the number of voyage days in the month.
  • N: Revenues and expenses are recognized in the month in which they occur.

Prorating Voyages

Depending on your configuration, your accrual calculation may be prorated. The prorating of a voyage P&L is basis the voyage days before the end of the month. For example, if a 40-day voyage takes 15 days in April and 25 days in May, we would recognize 15/40 = 37.5% of all expenses and revenues for end of April, as 15 days were past. For this same voyage, running accruals for May 31, we would recognize 100% of all expenses and revenues, as the voyage was 100% completed before this date.

TCO Voyages

Time Charter Out voyages are all treated the same, regardless of system configuration. Time Charter Out voyages will by default always be prorated. This can be overridden using the Apply TC Hire To Period calculation option on the Accrual form. Additionally, TCO voyages are not accrued until they have commenced.

Approve and Post

After you have calculated and created the Accrual journals, it is still necessary to approve and post the journals. Accrual journals will follow your security settings for approving and posting but also have some convenient functionality:

• When posting the journal for the end of the accrual period, you will be prompted to post the additional reversal accrual journal for the next day.
• When reversing an accrual journal, you will be prompted if you want to reverse the reversal journal as well.
• Use the check box on the Post Invoices List to approve and post accrual journals in bulk.