---
title: "Configuring Accruals and Deferrals"
description: "The Accruals and deferrals accounting rule type is used to enter business transactions for the appropriate period in Lucanet. Using this accounting rule type, for example, it is possible to plan business transactions in which the services are purchased or sold in advance whereas the payment is made as a one-off payment in advance."
source_url: https://support.lucanet.cloud/en/documentation/consolidation-financial-planning/planning/accounting-rules/configure-accruals-deferrals
language: en
last_updated: 2023-08-16
---
# Configuring Accruals and Deferrals

## Overview

The **Accruals and deferrals** accounting rule type is used to enter business transactions for the appropriate period in Lucanet. Using this accounting rule type, for example, it is possible to plan business transactions in which the services are purchased or sold in advance whereas the payment is made as a one-off payment in advance.

If the accruals and deferrals process is repeated at particular intervals and with a specific amount, then the planning can be repeated automatically. This is practical when recurrent business transactions are involved, e.g. insurance premiums that have to be paid annually in advance.

## Configuring Accruals and Deferrals

To configure an accounting rule of the type **Accruals and Deferrals**:

{% stepper %}
{% stepper-step %}
In the dimension bar, select the combination of **data level** and **reporting entity** for which the accounting rule should apply.
{% /stepper-step %}
{% stepper-step %}
In the tree view, select the desired element (ledger, account, or item).
{% /stepper-step %}
{% stepper-step %}
Click **Edit** in the top right to open editing mode.
{% /stepper-step %}
{% stepper-step %}
If you selected a ledger, open the **Balance with carry forward from previous period** tab.
{% /stepper-step %}
{% stepper-step %}
Select **Accruals and deferrals** as the accounting rule from the **Type** drop-down list.
{% /stepper-step %}
{% stepper-step %}
Add or delete a **time period** to, e.g., configure seasonal differences within a planning period.

{% /stepper-step %}
{% /stepper %}
{% info-box %}
Notes on the **add/delete time period** options:

- Newly added time periods are displayed on the **Configuration** tab.
- When deleting a time period, the currently selected tab is always deleted.
{% /info-box %}

## Options on the Configuration Tab

Configuration options for Accruals and deferrals

The following options are available on the **Configuration** tab:

### VAT/Input Tax Configuration

Optionally, you can select a VAT/input tax configuration from the drop-down list (see [VAT/input tax administration](https://support.lucanet.cloud/en/documentation/consolidation-financial-planning/planning/accounting-rules/vat-input-tax.md)).

### Period

In the **Period** field, specify the period in months during which the prepaid expenses/deferred charges should be resolved.

### Automatically Repeat Planning

Activate the **Automatically repeat planning** check box if the accruals and deferrals process is repeated at particular intervals and with a particular amount.

Once the checkbox is activated, you can enter a percentage relative to the original value. This allows you to account for both price increases and reductions.

### Payment Type

The following payment types are available:

| Payment type | Description |
|---------|---------|
| With immediate cash flow impact | If the payment will be received or made within the same month |
| Time-delayed payment | If the incoming or outgoing payments are made at different times |
| Down payment transaction | If a down payment is required when the transaction is completed |

### Cash Flow Impact

{% info-box %}
The **Cash flow impact** section is only visible if you selected **Time-delayed payment** or **Down payment transaction** from the payment type drop-down list.
{% /info-box %}

In the **Cash flow impact** section, specify a due date for the payment, along with percentage of the outstanding receivable or liability to be paid in each case.

#### Due by date

- Enter 0 for immediate payments.
- Enter a positive number for a subsequent payment, e.g. 2 = 2 months later.
- Enter a negative number for an earlier payment, e.g. -2 = 2 months earlier.

{% idea-box %}
To see an example of how average incoming payments can be entered on the **Month** basis, check [Cash Flow Example](#cashflowexample).
{% /idea-box %}

#### Share

Enter what percentage of the outstanding receivable or liability will be paid by the specified date.

### Cash Flow Example

Example

Setting

Customers pay after 15 days on average

Example setting for the cash flow impact

Customers pay after 30 days on average

Example setting for the cash flow impact

Customers pay after 45 days on average

Example setting for the cash flow impact

### Post to

Specify the accounts to which postings will be made in the **Post to** section.

The accounts to be specified depend on the chosen payment type.

#### With immediate cash flow impact

- **Bank account**: An account for the contra entry
- **P&L account**: An account to which the accrued account is posted

#### Time-delayed payment

- **Bank account**: An account for the contra entry
- **Receivables or liabilities account**: An account to which the corresponding value is posted until the cash flow impact takes effect
- **P&L account**: An account to which the accrued amount is posted