IMOS - Monthly Accruals

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

Closing accruals keeps an accurate picture of the revenues and expenses of open voyages in the same accounting period. Accrual functionality enables you to allocate revenues and expenses over the period of the voyage. Accruals handle deferrals of revenues and expenses over financial periods.

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

Required Setup

Before you run Monthly Accruals, complete the following setup to achieve accurate results:

1. Complete your Chart of Accounts.

2. Determine whether you use Accrual By Ops or Accrual By Act.

3. Complete your Accrual Business Rules.

4. Set your accrual basis: always prorate or use an operations basis date (CFGVoyaccAccrualDate).

Running the Monthly Accruals

IMOS supports accruals on a monthly or end-of-period basis. Enter the year and month, or a specific date, and IMOS then generates a list of accrual calculations on a voyage percent-to-complete basis.

The following Voyage P&L columns determine the value that is accrued:

1. Estimated column: The values are generated from the original Estimate of a charterer before it is fixed.

2. Actual column: The values match the Estimated column when the voyage begins. They are continuously updated as a running forecast as invoices are issued and data changes.

3. Posted column: The values are Actual values that are posted to the General Ledger.

• The accrual value is the difference between the Actual and Posted amounts.

• When a voyage goes beyond the accrual period, IMOS prorates.

Calculating Accruals

Step 1: Open Monthly Accruals

On the Financials menu … → under Period Closing → select Monthly Accruals.

Step 2: Calculate Accruals

You can set filters through the configuration flags so that each Monthly Accruals run applies the same filters every month.

1. Accruals Year/Month: Enter the month and year for the calculation.

   

   1. IMOS supports accounting periods on a monthly and yearly basis. For example, if the closing period is January 2025, transactions with an accounting date of January 31, 2025, or earlier cannot be posted.

2. Select the accruals Basis. You can calculate based on Recalculation or saved Daily Snapshots:

• Recalculation: For a standard Monthly Accrual calculation, set the Basis to Recalculation.

• 1. 

• Daily Snapshots:

1. 1. 1. 1. Specify the snapshot Type and, for non-current 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.

         2. Accruals snapshots appear in the Snapshot and Period Comparison selection lists on the Voyage P&L.

         3. To 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: 

            1. Apply Additional Hire to Period

            2. Apply TC Bunker Adjustment to Period

            3. Apply TC Expenses to Period

            4. Apply Other Revenues/Expenses to Period

            5. Apply Port Expenses to Period

         4. 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.

3. Filter Options:

   1. You can configure options to fit your accounting methods, such as running accruals only for completed voyages rather than a percentage of a voyage. This also applies to managing offhire that overlaps an accrual period.

      • Example: You can run accruals for a specific Company code, Operation Type, or Vessel Name. You can also generate the accrual data snapshot when you generate accrual Journal Entries, and then view it in the Voyage P&L.

      

   2. Use these filters to limit which voyages are included in the accrual. Select filters to limit accruals by Trade Area, Company/LOB, Vessel Fleet, Vessel Type, Operation Type, Pool, or a specific Vessel and Voyage No.

   3. In a Head Company and Subcompany organizational structure, you can also set up closing periods based on a specific Company code.

      1. For organizations with a few fleets, you may not need to set these filters options.

      2. For organizations with large fleets, use filter options such as Company/LOB, to improve run time.

4. Lower Bound Date and Lower Value Limit:

   

   
   

   1. Select the following filters, which are unique to Accruals:

      1. Lower Bound Date: The form filters out any voyages that commence before this date. If this filter is empty, all opened voyages are included.

      2. Lower Value Limit: The form filters out any individual P&L line items less than this limit. If it is empty, all line items is included.

5. Select P&L Calculation Options:

• To apply P&L calculation options, select the appropriate check boxes. For more information, see IMOS - P&L - P&L Calculation Options.

6. Select the button to calculate the Monthly Accrual.

Step 3: Validate the Monthly Accrual Result

• To view a record in the Bill Viewer, right-click a line item, and then select Preview Journal to view the details.

  

  
  

• To select the records you want to post, select their S check boxes, or select the Select All check box.

  

  • 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 the R check box is selected, a reversal of the accrual for the first day of the next month is generated. If you do not want to create a reversal of the accrual, clear the R check box.

Step 4: Create the Monthly Accrual Journals

• Select the Create Accrual Journals button to do the following:

  • Open the Monthly Closing Accruals report, which you can be download as a PDF and save for auditing purposes.

  • Create both Monthly Accrual journals and Monthly Accrual reversal journals.

  • Note the accounting dates and amounts. A Monthly Accrual journal has an accounting date of the last day of the month, and a Monthly Accrual reversal journal has an accounting date of the first date of the next month. The amounts offset each other.

    

• To view Summary, Details, or Account Analysis reports, select Report.

Step 5: Approve and Post the Monthly Accrual Journals

After you calculate and created the accrual journals, you must still approve and post them. Accrual journals follow your user security settings for approving and posting, and also include the following features:

• When posting the journal for the end of the accrual period, you are prompted to post the additional reversal accrual journal for the next day.

• When reversing an accrual journal, you are asked whether you want to reverse the reversal journal as well. For more information, see the Monthly Accrual Reversal Procedure section later in this article.

• Use the check box on the Post Invoices list to approve and post accrual journals in bulk.

You can find the created journals in the Financials module on Transaction Summary, the Post Invoices list, or in the Voyage Invoice List for a specific voyage.

From the Transaction Summary and Post Invoices lists, you can bulk post the journals in bulk or individually.

From the Voyage Invoice List, select the Post link on the left side of the form, and then select Save and Post.

After both journals and reversals are posted, the Trans No. ends with a N.

Monthly Accrual Reversal Procedure

To reverse an accrual and its reverse, you must reverse both items. Use one of the following methods:

Voyage Invoice List:

1. Select specific voyage and go to the Voyage Invoice List.

2. Select Review on the Monthly Accrual, and then select the Reverse button.

3. On the Reverse Invoice window, select OK. A confirmation window appears asking whether to reverse the original journal. Select Yes to proceed.

• The Trans No. of the reversed invoice ends with an R.

• The reversed accruals remain in the Voyage Invoice List as Pending until a new accrual for the same date is generated.

• After you generate a new accrual and refresh the page, the status changes to Ready to Post.

4. Select Post on the left side of the form, and then select Save and Post.

Transaction Summary:

1. Go to the Financials Module → Transaction Summary.

2. Filter the list to find your monthly accrual by voyage, vessel, date, transaction type, and so on.

3. Select the check box in front of each invoice.

4. Select the Reverse button at the top of the list.

5. Enter Reversal Date, Reversal Invoice No., Reversal Reason, and, if required, Reversal Note.

6. Select OK to complete the reversal.

⚠️ Important Notes⚠️ :

• If you run a second monthly accrual for the same period without reversing the first one, the second accrual overwrites the previous reversal entry. Best practice is to reverse the first accrual before running a new one.

• The reversal date you specify is the accounting date for the reversal transaction. Make sure the accounting period is open for that date.

• You cannot reverse accruals directly from the Post Invoices list. You must use the Transaction Summary.

Step 6: Fully Close the Account Period

After everything is done for the month, the Finance team can close the account periods by completing the following the steps below:

1. Enter the last date of the last open month.

2. Select the specific months you want to leave as open month in the Open Month column.

3. Make sure the status is F so that all other months are closed or partially closed:

   1. Finalized (F): All postings are blocked.

   2. Partial (P): All postings are blocked, except accruals and payments.

4. Select on the button.

Step 7: Month End Reporting

After fully close the month, you can use the Trial Balance, Balance Sheet, and Income Statement reports to help summarize your company’s financial performance. Organizations typically use three financial statements when IMOS is their main system.

For more information, see IMOS - Trial Balance, Balance Sheet, Income Statement.

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 based on 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, IMOS recognizes 15/40 = 37.5% of all revenues and expenses at the end of April, because 15 days have elapsed. If you run accruals for May 31 for the same voyage, IMOS recognizes 100% of all revenues and expenses, because the voyage is 100% complete before this date.

TCO Voyages

Time Charter Out (TCO) voyages are all treated the same, regardless of system configuration. TCO voyages are always prorated by default. You can override this by using the Apply TC Hire To Period calculation option on the Monthly Accruals form. Additionally, TCO voyages are not accrued until they have commence.

Uninvoiced Bunker Liftings

When you run Monthly Accruals for voyages with Bunker Liftings that are not bound to invoices, IMOS accrues the costs of the Bunker Liftings only if they have been consumed.