IMOS - Monthly Accruals

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🔑 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 in the same accounting period. Accrual functionality allows you to allocate revenues and expenses over the period of the voyage. In addition, accruals handle deferrals of revenues and expenses over financial periods. 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.

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).

Running the Monthly Accruals

Step 1:

On the Financials menu … > under Period Closing > click Monthly Accruals.

Step 2: Select Filters, P&L Calculation Options, & Basis

Accruals Year/Month: Enter the month and year for the calculation.
Filter Options: Select filters to limit accruals by Trade Area, Company/LOB, Vessel Fleet, Vessel Type, Operation Type, or Pool, or select a specific Vessel and Voyage No.
1. Note: If all filters are blank, the calculator will calculate accruals for all opened voyages.
Select P&L Calculation Options: To apply P&L calculation options, select the appropriate check boxes. Please refer to IMOS - P&L Calculation Options for further details.
Select the Calculation Basis: You can calculate based on either Recalculation or based on saved Daily Snapshots.
1. Monthly Accrual Calculation Basis: Daily Snapshots:
  1. 1. 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.
    2. Accruals snapshots appear in the Snapshot and Period Comparison selection lists on the Voyage P&L.
    3. 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.
    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.
Click the button to calculate the Monthly Accrual.

Further Details on Filters:

Lower Bound Date is applied to determine the earliest date to look at for generating the Accrual journals. The system will provide results only from that date forward.
Lower Value Limit is applied on individual items and is only applied upon saving. Anything greater than the lower value limit will still appear in the Preview but it won't be saved as part of the monthly journals. As a result, Accrual journals that have been created should not display the Monthly Closing Accruals amount with values under the Lower Value Limit.

Step 3: Validate the Monthly Accrual Result

To view a record in the Bill Viewer, including the details to be included in the Journal, right-click its line item and then click Preview Journal.
To select the records you want to post, select the check box in the S column, at the right, or select the Select All check box.
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.

Step 4: Create the Monthly Accrual Journals

Click the Create Accrual Journals button to do the following three things:
- The Monthly Closing Accruals report will open which can be downloaded as a PDF and saved for auditing purposes.
- Creates both Monthly Accrual journals and Monthly Accrual reversal journals.
- Take notes about the accounting dates and the 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 are net-off each other.

Note: 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.

To view Summary, Details, or Account Analysis reports, click Report.

Step 5: Approve and Post the Monthly Accrual Journals

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.

You can find the created journals in the Transactions Summary or the Post Invoices list under the Financials module.

In these lists, you can bulk post the journals, or individually post them.

Once both journals and reversals are posted, you are done with the Monthly Accrual process.

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 the 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.

Uninvoiced Bunker Liftings

When running Monthly Accruals for voyages with Bunker Liftings that are not bound to invoices, the Veson IMOS Platform (IMOS) will only accrue the costs of the Bunker Liftings if they have been consumed.

Related Configuration Flags, including CFGVoyaccAccrualType for Accruals by Account

Name/Flag	Description
Set threshold for monthly accrual line item amounts CFGAccrualThreshold	When enabled, sets a threshold for monthly accrual line item amounts. When the value is set to a number greater than 0, any line items that have an accrual amount with an absolute value below the threshold will not be selected in the accrual program by default.
Voyacc Accrual Type CFGVoyaccAccrualType	Enables an option to control the type of accrual items using Business Rules. There are five possible values: Ops (default): No change in behavior for accruals; the items generated are set as configured in the Business Rules. Act: New Business Rules are used for accruals. The items are grouped per their corresponding P&L accounts in the Business Rules (Accruals by Account). These are generated automatically upon opening the Business Rules form. ActCounterparty: Same as Act, but the accruals are also itemized per vendor. ActCounterpartyPort: Port expenses will be accrued on a separate line-item for each port and each counterparty, and all other items will be accrue per account and counterparty. ActPort: Port expenses will be accrued on a separate line-item for each port and all other items will be accrued per account. When set to a nondefault value, CFGVoyaccAccrualType adds a check box column to the Bill Viewer; to exclude a Bill Viewer row from Monthly Accruals, clear its check box.
Voyacc Always Prorate CFGVoyaccAlwaysProrate	When enabled, voyage accrual figures are always prorated; TCTO voyages are not affected.
Voyacc Accrual Date CFGVoyaccAccrualDate	Determines the day on which the accrual process recognizes a voyage for accrual. When a voyage is recognized, 100% of that Voyage P&L is accrued. If CFGVoyaccAlwaysProrate is set to N, depending on the value of CFGVoyaccAccrualDate, revenues and expenses are recognized basis the following: 1: Sailing date from first load port 2: First BL date; if there is no BL date or cargo, then accrual calculation changes to prorata 3: Voyage Commence Date 4: Voyage Completion Date 5: After All BLs Entered is selected on the Voyage Manager, Last BL date
Accruals by Day CFGAccrualsByDay	Specifies a date for running Monthly Accruals, rather than only at month end.
Ignore Accrual on Voyage Delete CFGIgnoreAccrualOnVoyageDelete	Allows deleting voyages even when the voyages have monthly accruals posted to them.
Accrual Time Zone CFGAccrualTimeZone	Sets the time zone offset to use when calculating accruals and bunker period journals. The default is 0 (GMT).
Allocate Bunkers to Voyage CFGAllocateBunkersToVoy	When enabled, post voyage bunker cost as the difference of bunkers used - bunker inv - accrue. See Allocating Period Cost to Voyages.
Separate and Mirror Profit Share Accrual CFGSeparateAndMirrorProfitShareAccrual	Accrues any profit share amounts on the voyage in a separate journal per counterparty. For a counterparty marked as Internal in the Address Book, posting the profit share accrual journal automatically generates a mirrored transaction: For an accrual done from company A to company B, the mirrored journals are generated from company B to company A, with the reversed signs. The new journal type requires a new Business Rule: MPAC:PROFITSHARE.
Voyacc Use Ballast Voyage Bill Codes CFGVoyaccUseBallastVoyageBillCodes	Creates distinct accruals Bill Codes for ballast voyages (voyages without a fixture), with a prefix of B.
Skip Zero Accruals CFGActSkipZeroAccruals	When enabled, eliminates any $0 line items in the Journal Entries generated from running Monthly Accruals.
Show Running Cost CFGShowRunningCost	When enabled, forces the Voyage P&L to break out the daily costs or the TC Hire in a section called Running Cost, separate from the expenses. For an Own voyage, the daily expenses will appear. For a TCI or TCO voyage, the Hire will appear.
Alloc TCO Misc Rev Expense to Period CFGAllocTCOMiscRevExpToPeriod	When enabled, miscellaneous revenues and expenses on TCO voyages are not prorated but allocated to the period the invoice date is in for accrual calculations.
Accrual Breakdown CFGActAccrualBreakdown	When enabled, accrual line items are broken down like the voyage profit and loss. When disabled, there are only two accrual lines, one for revenue and one for expenses.
Accrue Uncommenced TCO CFGAccrueUncommencedTCO	When disabled, TCO voyages that are not commenced will not be accrued.
Accrue by Charterer CFGActAccrueByCharterer	When enabled, monthly accruals can be made to counterparty specific financial account codes as mapped in the Business Rules table. Counterparty information, e.g. the fields 'vendorNo,' 'vendorName,' 'vendorExternalRef' and 'vendorCrossRef' have been added to the journal XML.
Enable Vessel Cost Breakdown on Voyage Journal CFGEnableVesselCostBreakdownOnVoyageJournal	Monthly Accruals and Voyage Period Journals will calculate the vessel cost for OVxx voyages without Head Fixture using the breakdown from Vessel form when it's defined.
Accrue Demurrage Bad Debt CFGAccrueDemBadDebt	When this config flag is enabled and CFGVoyaccAccrualType is set to Ops, when Accrual Percentage of a Laytime Calculation is less than 100%, demurrage bad debt is accrued with a journal separate from demurrage. Its source code is MACR and bill code is DEMBADDEBT. This feature is applicable to both laytime.exe and laytime_c.exe.
Voyacc Full on Loss CFGVoyaccFullOnLoss	When enabled, for loss voyages, loss is 100% recognized as of the date trigger set in the flag CFGVoyaccAccrualDate. CFGAutoPnLsnapshot must also be enabled.
Auto P&L Snapshot CFGAutoPnLsnapshot	When enabled, current snapshots in the voyage P&L are updated when Cargo and TC contracts connected to the voyage are updated. For Time Charter contracts, snapshots are only updated for related voyages whose total revenues, total expenses, total profit/loss, or TCE have changed; the Estimate, Actual, and Posted columns of the P&L are checked. An update is also done when voyage-related invoices/Bunker Requirements are created/updated/deleted and when changes are made to Bunker Swaps connected to Cargoes in the voyage. When XML notifications are enabled and voyage and voypnl are specified as values for flag notificationsIncludeList, XMLs are exported in this order: voyage, voypnl (estimate), voypnl (actual), voypnl (posted).
Voyacc Accrual Snapshot Selected CFGVoyaccAccrualSnapshotSelected	When enabled, accrual snapshots are saved only for selected records in Monthly Accruals rather than for all retrieved.
Aggregate Fully Posted Bunker Accruals CFGAggregateFullyPostedBunkerAccruals	When enabled, the Veson IMOS Platform will aggregate bunker accruals if corresponding bunker type is fully posted to voyage.
Itemize Bunker Journal CFGItemizeBunkerJournal	When enabled, instead of being aggregated per fuel type, bunker journals are generated in the breakdown level.
Account Groups CFGAccountGroups	When enabled, users will be able to run and post accruals per specific Account Groups, report on these Account Groups, and use the various IMOS lists based on filters of these groups.
Accrue FOB Voyages CFGAccrueFOBVoyages	When enabled, demurrage claims that are added to FOB/Delivered Cargo voyages in the system will be available to be included in the Monthly Accruals. This will be applicable for all FOBV operation types.
Allow Intercompany Journals CFGActAllowIntercompanyJournals	Enables creating a journal that can balance the books automatically for internal companies.
Create Simulated Accrual Notifications CFGCreateSimulatedAccrualNotifications	When enabled, a new button will be added to the Monthly Accruals program called "Create Simulated Notifications“. When pressed, a user can generate the journal notification messages without actually posting them down to the general ledger in IMOS. This allows organizations to extract data out of the system for different Accrual configurations and report on the data without impacting the general ledger in IMOS.