SAP Accrual Deferral Posting

What is Accrual & Deferral function?

In SAP, Accrual & Deferral is a document method that involves making provisions at the end of a month and reversing them on the first working day of the next month. 

• Accruals: Occur when cash is exchanged after the delivery of goods or services.

• Deferrals: Occur when cash is exchanged before the delivery of goods or services.

• Deferred revenue: The portion of a company's revenue that has not been earned, but cash has been collected from customers.

• Accrued expenses: Expenses of a company that have been incurred but not yet paid

Accrual Posting in SAP :

Accrual posting involves recognizing revenue and expenses when they are earned or incurred, regardless of when the amount is actually received or paid.

Example: Suppose BAJAJ Pvt. Ltd, provides services during the month of December but does not receive payment until January of the following year.

Accrual accounting entries would be -

1. At the end of month (on 31.12.2023) -

Accrued Income a/c Dr. 50000

To Income a/c Cr. 50000 -

2. At the beginning of next month(on 01.01.2024 Reversal)

Income a/c Dr. 50000

                                To Accrued Income a/c Cr. 50000 -

To Post in SAP system -

PATH>> SAP Easy Access > Accounting > FI > General Ledger > Periodic processing > Closing > valuate>>

STEP 1: Enter accrual/deferral document (with T-Code FBS1) at the end of month.

Enter Company code, doc type, Period Posting date, currency and

Reversal Reason- Reason for reversal or inversing posting.

Reversal Date- Date on which the reverse posting is to be made.

Enter both line item fields and click on Post

Document 100000013 was posted in company code BAJA

>> Document display

STEP 2: Reverse accrual/deferral document (with T-Code F.81) on 1st of next month.

Reversal - this involves the automatic cancellation of certain adjusting journal entries made during the end-of-period closing process.

Display Document

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Deferral Posting in SAP :

Deferral posting in accounting involves recognizing revenues or expenses at a later date than when the actual payment is paid or received. This is often associated with unearned revenue or prepaid expenses.

Example: Suppose BAJAJ Pvt. Ltd, received payment in the month of December but service are rendered in the month of January of the following year.

Deferral accounting entries would be -

1. At the end of December (on 31.12.2023) -

Expenditure A/c               Dr. 50000

To Deferred Expenditure a/c Cr. 50000

      2. At the beginning of January (on 01.01.2024 Reversal) -

Deferred Expenditure a/c Dr. 50000

To Expenditure A/c Cr. 50000

To Post in SAP system -

PATH >> SAP Easy Access> Accounting> FI> General Ledger> Periodic processing> Closing> valuate>

STEP 1: Enter accrual/deferral document (with T-Code FBS1) at the end of month.

Enter Company code, doc type, Period Posting date, currency ,reversal reason & date

Enter both line item fields and click on Post.

Document 100000015 was posted in company code BAJA

>> Document display

STEP 2: Reverse accrual/deferral document (with T-Code F.81) on 1st of next month.

Display Document

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