Split Period Updating for Nominal Journals

Supplier Invoices for services will, at times, specify a date range for which the service covers that relates so two or more accounting periods – insurance, service agreements etc. Similarly, when customers are supplying services their invoice they may invoice along similar lines – washroom services being billed on a quarterly or annual basis.

As the income / costs relate to multiple periods some users will post these invoices to accrual or prepayment accounts and then raise manual journals within the Nominal Ledger to split these invoices over the required accounting periods. This new feature allows you to specify the number of periods the nominal analysis should be apportioned over and creates these journals for you.

Sales / Purchase Transaction Entry

On entry of an invoice, credit or invoice adjustment the system will prompt after confirmation that the totals are correct whether the journal is to be split over multiple nominal periods and, if so, how many (max 12).

The update to the Sales/Purchase Ledger is unchanged – turnover/costs are allocated based on the period of the transactions, and the transaction is written as standard. The tax point and VAT treatment of the invoice is also unchanged – arising as per date of invoice.

On the update to the Nominal Ledger however additional journals are written to correspond to update the accruals and prepayment accounts and apportion the income / costs.

The standard journal for the above transaction would be

Date Period Debit-A/C Credit-A/C Amount

17/11/16 11 260 800 (Creditor Control) 433.33

17/11/16 11 850 (Tax) 800 86.67

This journal is still written but in addition the following entries are posted

Date Period Debit-A/C Credit-A/C Amount

17/11/16 11 740 (Prepayments) 260 288.88

17/12/16 12 260 740 144.44

17/01/17 1 260 740 144.44

The value of the invoice (net of VAT) is split by the number of periods the invoice is to be apportioned over, any rounding differences going to the first period, and a journal to move all bar the first periods value is posted to move the value to the Nominal prepayments account. Journals are then posted to move each period value back to the expense code.

If the journal crosses the end of the financial year, as above, and the new year has not yet been opened then the journals will still be written – the Nominal Ledger year end procedure will review the nominal transactions for any ‘future’ postings and update the account values accordingly.

Invoicer and Order Processing

Invoices and Credits raised from the Invoicer and Order Processing applications will not prompt automatically to apportion over multiple periods. You can still, however, use this facility.

For Invoicer you can configure a keyboard prompt to update the SLT/PLT data item that holds the number of nominal periods to post over.

For Order Processing you can also configure a keyboard prompt or create an Order Header data item for the number of periods and within your invoice/credit document set to copy this value to the transaction file.

Installation

Database Changes

Changes are required to the Sales, Purchase and Nominal Transaction files to hold the period count. To add these items select Installation from the main menu followed by Application Manager and then Restructure A Database. Select the Sales, Purchase or Nominal Ledger application as required. Elect to update the Live Files and then select the Transactionsfile.

To insert a new item press <Enter> against a blank entry, enter the title as required and press <Enter>, select the item type (using the drop-down list if required), and depending on item type select the size required.

Item Name Type Description

PER-SPLIT N For the Sales/Purchase Transactions this holds the number of periods the nominal journal has been analysed over. For the Nominal Transaction this is used to identify journals that need to be updated to the accounts after the year-end.

Once the required items have been recorded press the <ESC> key and select the UPDATEbutton to save the database changes. When prompted respond ‘Y’ to the prompts to ‘Extract Existing Data to New Database Structure’ and, if appropriate, ‘Copy Table Entries from Old Database to New Database’. Final prompts ask to ‘Remove (.OLD) Database’ and to ‘Carry Out the Same Restructure on the BASE File as well’ – respond as required. If you select to update the base file you need to manually insert the new items at the same data item positions as on the live file.

Set Database Profiles

The new split items need to be referenced within the Database Profiles. To update these settings select Installation from the main menu followed by Application Managerand Set Database Profiles. Choose the Sales, Purchase or Nominal Ledger application as required before selecting the Trans Optional 4 parameter screen (Sales / Purchase) or Trans Optional 2 for the Nominal Ledger.

On the left of the screen is the prompt to define the data item number for the No-Split Nominal Periods. Reference the data item number of the equivalent item created above, <F4-Select> is available if required. For the Nominal ledger the prompt to define the data item number is ‘Future Posting’.

System Profiles

New options have been added to the Sales / Purchase System Profiles to reference the nominal account to be used for Accruals and Prepayments. To update select Installation from the main menu followed by Application Manager and then System Profiles. Select the Sales or Purchase Ledger application, the new parameter is on the second screen of parameters.

Nominal Code for Accruals (PrePayments) – reference the nominal account to be used to post the accrual and prepayment journals against.

As mentioned earlier this option is only applicable if the ledgers are configured for real-time updating to the Nominal Ledger – parameters for this are on screen 1 of the system profiles.