About Simple Accruals & Prepayments
The Simple Accruals and Prepayment features in Clubtreasurer will meet the requirements of most customers and is designed for cash-based organisations with basic accrual/prepayment requirements, e.g. end of year accruals balance only.
If you need to produce your accounts on an ongoing accruals basis you should review the Advanced Accruals & Prepayments feature.
How it works
Clubtreasurer includes special accounts called *DEBTORS and *CREDITORS to help you track:
- Debtors (money owed to you)
- Creditors (money your club owes)
You can also create your own Debtor or Creditor accounts if needed.
- Create normal Receipt/Payment entries using the *DEBTORS or *CREDITORS account.
- These entries will show up as Current Assets (Debtors) or Current Liabilities (Creditors) on your Balance Sheet.
- When the cash is actually received or paid, use Clubtreasurer’s Reverse feature to cancel the original entry and record the real transaction with the correct date and bank account.
*See Receipts & Payments help page for how to reverse transactions.
1: Expense Accruals (Cost incurred now, paid later)
Scenario: You need to accrue for £100 food & drink costs that were incurred in January, but not yet paid. The expense should appear on the P&L in January and show a liability (creditor) balance for the accrual in the Balance Sheet. In February, the expenses are paid to the supplier and the liability is reversed and cash/bank balance is reduced.
Step 1: (January): record the Expense Accrual by creating a new Payment transaction against your Creditor A/c when occurred.
Your January P&L will now show a £100 charge against Food & Drink Expenses, and the Creditor balance will show under liabilities in your Balance Sheet:
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 10-Jan | Payment – Food & Drink Expenses | Creditor A/c | £100 |
Step 2: (February): when the supplier is paid:
- Step 2.1: Open and Reverse the original January Expense Accrual Payment transaction (Use the “Reverse” button):
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 1-Feb | Payment – Food & Drink Expenses | Creditor A/c | – £100 |
- Step 2.2: Create (or Import) a new Payment transaction against your Bank A/c. Note this cancels out the Food & Drink Expense so it correctly shows as zero on your P&L in February. The liability balance is also cancelled out and the Bank A/c balance now shows the cash has been paid out.
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 1-Feb | Payment – Food & Drink Expenses | Bank A/c | £100 |
If your accrual from Step 1 was included in an opening creditor balance and no actual transaction exists then you can combine Steps 2.1 and 2.2 into an Account Transfer:
– FROM the Cash/Bank Account the accrual was paid out of
– TO the Creditor Account.
2: Revenue Accruals (Income due now, paid later)
Scenario: Membership fees for John Smith are due in January for £50. You need to recognise the membership income in your January P&L, but as John has not yet paid these you must show this as a Debtor balance in your Balance Sheet. John pays his membership late in March and you now need to remove the Debtor balance and record the cash received into your Bank A/c.
Step 1: (January): record the Receipt Accrual transaction by creating a new Receipt transaction against your Debtor A/c when the membership is due:
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 1-Jan | Receipt – Membership Receipts | Debtor A/c | £50 |
Step 2: (March): when John pays:
- Step 2.1: Open the original January Receipt Accrual transaction and create a reversing transaction (click Reverse button).
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 15-Mar | Receipt – Membership Receipts | Debtor A/c | – £50 |
- Step 2.2: Create (or Import) a new Receipt transaction against your Bank A/c:
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 15-Mar | Receipt – Membership Receipts | Bank A/c | £50 |
3: Expense Prepayments (Paid now, incurred later)
Scenario: You have paid for £100 Rental Costs in advance in January but they will not be incurred until February. This should be reflected in the Bank A/c and Debtors balances in January Balance Sheet, but the expense should not show in the P&L until February. Also, the Debtor balance should be cleared in February.
Choose one of the Methods below for Expense Prepayments.
3.1 Expense Prepayments – Method 1
You must use Method 1 if you import your bank statements via the Transaction Import process.
Step 1: (January):
- Step 1.1: Create a normal Payment transaction to record the payment made from your bank account
👉 This Payment will already exist if you are converting an existing transaction – please go to Step 1.2
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 15-Jan | Payment – Rental Costs | Bank A/c | £100 |
- Step 1.2: Create an equivalent Expense Prepayment (Payment) transaction with the same Date and Cost Code, but select a Debtor A/c and, importantly, enter a negative value £-100 (minus £100)
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 15-Jan | Payment – Rental Costs | Debtor A/c | – £100 |
Step 2: (February)
- Open and Reverse the January Expense Prepayment transaction:
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 1-Feb | Payment – Rental Costs | Debtor A/c | £100 |
3.2 Expense Prepayments – Method 2
Method 2 cannot be used if you create your transactions using the Transaction Import process.
- Step 1: (January): create an Account Transfer transaction from Bank A/c to Debtor A/c when the expense is paid.
| Date | Account Transfer From | Account Transfer To | Amount |
|---|---|---|---|
| 15-Jan | Bank A/c | –£120 | |
| Debtor A/c | £120 |
- Step 2: (February): when the expense is incurred create Payment transaction from Debtor A/c
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 1-Feb | Payment – Rental Costs | Debtor A/c | £120* |
If you need to spread the prepaid cost over a number of periods – for example you have paid an annual rental expense and need to charge 1/12th cost to each month throughout the year – then you would repeat Step 2 for every month of your year and charge £10 (£120/12) to each month (or whatever portion is required). As you move through the year your Debtor balance will reduce to zero on the final month.
4: Revenue Prepayments / Deferred Income (Received early)
Scenario: In December, you received £250 in advanced Membership payments due in January. You need to record the advanced payment into your Bank A/c as well as in your Creditor A/c to reflect the liability. In January you can recognise the payment in your P&L and clear the liability balance.
Choose one of the Methods below for Revenue Prepayments.
4.1 Revenue Prepayments / Deferred Income – Method 1
You must use Method 1 if you import your bank statements via the Transaction Import process.
Step 1: (December):
- Step 1.1: create or import a Receipt transaction to record the advance membership payment(s) made into your bank account.
👉 This Receipt will already exist if you are converting an existing transaction – please go to Step 1.2
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 20-Dec | Receipt – Membership Income | Bank A/c | £250 |
- Step 1.2: then, create an equivalent Revenue Prepayment (Receipt) transaction with the same Date and Cost Code, but select a Creditor A/c and, importantly, enter a negative value £-250 (minus £250)
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 20-Dec | Receipt – Membership Income | Creditor A/c | – £250 |
Step 2: (January)
- Open and Reverse the December Revenue Prepayment transaction:
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 1-Jan | Receipt – Membership Income | Creditor A/c | £250 |
4.2 Revenue Prepayments / Deferred Income – Method 2
Method 2 cannot be used if you create your transactions using the Transaction Import process.
- Step 1: (December): create an Account Transfer transaction from Creditor A/c to Bank A/c when monies are received.
| Date | Account Transfer From | Account Transfer To | Amount |
|---|---|---|---|
| 20-Dec | Creditor A/c | -£250 | |
| Bank A/c | £250 |
- Step 2: (January): create a Receipt transaction for the Membership payment against Creditor A/c when the event is run.
| Date | Receipt/Payment & Cost Code | Account | Amount |
|---|---|---|---|
| 1-Jan | Receipt – Membership Income | Creditor A/c | £250 |
Adding Opening Accruals & Prepayment Balances
You can add opening balances for accruals and prepayments directly into your Debtor or Creditor accounts using Clubtreasurer’s simple accruals method.
Adding Opening Balances (at setup)
Step 1:
Go to your Debtor or Creditor account and enter the relevant opening balance.
- Use Debtors for prepayments or income owed to you.
- Use Creditors for expenses incurred but not yet paid.
Step 2:
When the actual payment is made later, simply create an Account Transfer:
- From: Your Cash/Bank Account
- To: The Creditor Account
This cancels the brought-forward balance and reflects the outgoing cash movement.
No need to create a Payment or Receipt transaction — these were already recorded in the previous financial year and shouldn’t affect the current Profit & Loss account.
Adding Opening Balances Retrospectively
If you forgot to include opening accruals or prepayments when first setting up your accounts, you can still add them later. Here’s how:
Step 1: Temporarily Adjust the Financial Year
- Change your Financial Year-End to a date before the opening balance date.
- Go to: Setup > Organisation & Subscription
- This lets you edit accounts that may otherwise be “locked” due to age.
Step 2: Enter Opening Balances
- Open your Debtor or Creditor account and enter the correct opening balance.
Step 3: Adjust the Current Year
If you’ve already recorded a Receipt or Payment this year for a transaction that actually belongs to a previous year:
Example: Expense Accrual (Creditor A/c)
3.1 Delete the Payment made from your bank account this year.
- This expense was from the prior year, so it shouldn’t appear in this year’s Profit & Loss.
3.2 Instead, create an Account Transfer:
- From: Your Bank Account
- To: The Creditor Account
This clears the opening balance and reflects the cash movement correctly — without affecting this year’s income or expenses.
Account Transfers affect your Balance Sheet but not your Profit & Loss.
Contents
- Accruals and Prepayments
- Simple Accruals and Prepayments
- Advanced Accruals and Prepayments
- Accounting for Funds held on behalf of Members for 3rd-Party Purchases