HQ – Accounting: Accrual Procedures for Staff



Prepaid and Accrual Procedures

Temple Israel’s fiscal year end is June 30, 2016. Please be aware of the following few key fiscal year-end accounting practices and the procedures. They come down to these four:
-Prepaid Expenses
-Deferred Revenue
-Accrued Expenses
-Accrued Revenue

PREPAID EXPENSES – An item is considered prepaid when it is paid before June 30, 2016, and we will not receive the goods or services until after June 30, 2016.
Example: If you are purchasing school supplies for usage in September 2016, but you’ve received the invoice on June 15, 2016, this is a prepaid expense. You are paying in advance for something you are going to use in the next fiscal year. If you have to pay for an advertisement before June 30th for our High Holiday service in October 2016 this is also a prepaid expense because the service will occur in the next fiscal year.

Complete a 2015-2016 check request. Indicate account “10-00-1401-0000.” In the comment area, as an example, write “to be charged to 2016-2017; Building-Supplies, 10-xx-5411-0000.”
Remember, you can only have a Prepaid Expense before June 30, 2016.

ACCRUED EXPENSES – An item is considered accrued when it is paid for after June 30, 2016, and the items or service was received before July 1, 2016.
Example: You ordered supplies online on June 15, 2016. It appears on the July 2016 American Express bill. This item will be paid in July 2016 but the charge has to be accrued (charged) against the closing fiscal year.
***Important- We must receive all American Express receipts (paper and/or email) promptly after each purchase.*** Especially through early-July, we must get your approved receipts immediately.

If you have an invoice, complete a 2015-2016 check request. In the case of the American Express charge, forward the email order documentation to Accounts Payable. Complete the GL codes and description as usual. In the comment area (or in the email) indicate “2015-2016 Expense.” The cutoff for accrued expenses is July 17, 2016.
If you are aware of services provided that have not been invoiced, send me an email with the details. We must accrue expenses to the fiscal year that the goods or services provided.

After July 17, all expenses will be charged in 2016-2017 and the respective 2017 budget will have that much less available for 2017 expenses. Make sure all 2015-2016 invoices have been paid or Finance has been instructed to accrue the invoice. Contact Finance staff to confirm if all material invoices have been accounted for.

DEFERRED REVENUE or ACCRUED REVENUE – If you are aware of collections that should be deferred income to the next fiscal year please contact me to discuss. On the flip side, if you are aware that Temple Israel has not collected for donations or services provided by June 30 contact me to review it.
If you have any questions regarding the above or any budgetary questions, please contact Finance staff.