Finally, we have a solution for managing purchase accruals in D365 finance an operation which was not available as good solution for a long time.

As we know we had two different methods Accrual scheme and periodic journal, but both had its own issue but now using Subscription billing Expense deferral we can solve this problem in better way.

You can visit previous blogs in this series: Part-1, Part-2, Part-3, and Part-4

Scenario: Let’s say we but Insurance subscription for a year and now we create and post PO invoice, so system should post this in Prepaid account and create Accrual schedule or deferral schedule.

Expected accounting entry:

At the time of Invoice:

Prepaid Expense Insurance (Purchase accrual) Debit 12,000

Vendor Credit 12,000

Monthly entry:

Insurance expense Debit 1000

Prepaid Expense Insurance (Purchase accrual) Credit 1,000

Configuration:

Navigate to Subscription billing > Revenue and Expense and Deferrals > Setup > Items deferrals & Deferrals defaults

Process:

Step-1: Create Purchase order

Step-2: Create and post PO invoice

Step-3: Analyze PO invoice, we can see System has posted entry to account which we have setup on Deferral setup

Step-4: View and recognise Schedule

Subscription billing > Revenue and expense deferrals > View deferrals schedule > Select line to recognize > Process

Step-5: View posted schedule

That’s it for this blog, hope this will help you in managing this use case in your project.

Thank you !!! Keep reading and sharing !!!