The following is a full transcription of the video above:
“In this video, we will go over how to use the recurring journal entries in . This is useful if you have entries that recur at a specific time. Generally, that would be monthly, but we can always set that up the way we want to.
To start, search Recurring General Journals. This is our DEMO company, and this is what the recurring general journal template looks like. We have a Batch Name. We can have different batches that we can set up.
The first field in our line is the Recurring Method. You can see that we have a few options here. This relates to the recurring amount of our line. So, if we have a fixed amount (for example - for rent expense) that'll be the same every month, we'll choose ‘Fixed’, and that amount will stay constant.
‘Variable’ is if it's recurring but it's a different amount every month. Putting it to variable will set the amount to zero after it's posted so we can go ahead and choose a different amount for it.
‘Balance’ is based on an allocation among specified accounts. And then these reversing ones are similar to their counterparts, but a balancing entry will also be posted.
So, we can go ahead and do a very simple fixed line item here. We will choose ‘Fixed’. The Recurring Frequency is the frequency we want the entry to post. You'll put here the date formulas. You can search a list of Microsoft’s date formulas.
I’ll go ahead and enter this 1D+1M-1D here. This is a date formula that will have the posting date the last day of the month regardless of how many days are in the month. You have to be careful with setting these date formulas taking into consideration that some months will have a different number of days. The Microsoft website has a good resource on how to use these date formulas:
We will need to put in a Document No.. Let's go ahead and say TEST Rent and our work date right now is for June 1. So, we can change this to the end of last month.
We can choose the Account Type we want to post our entry to. I'll go ahead and say it's a G/L account, and this will be for rent, so I’ll choose the Rent Expense and that'll fill in the Description. Now we can select the Amount. Let's say we pay $8,000 a month for rent.
This is the rent expense side. There are two ways to have this balanced, we can have another line here for let's say the cash account that will balance this rent expense, or we can click into the Allocated Amt. which will do the same thing. We choose our cash account here, so we'll choose our bank account. And then we can choose the allocation by quantity or percentage. I’ll will go ahead and just allocate 100% of that to our bank account and you'll see that we have the 8000 with the negative sign to balance. Close this. That is the gist of setting up recurring journals.
After we're done with this line, you can go ahead and Post it. So, now that it's been posted, we'll see here that since we chose the fixed recurring method, nothing should change. The amount is still the same at $8,000 and the allocation is the same, but the posting date has changed to the end of the current month because of our date formula we chose in our recurring frequency.
If this were a variable recurring method, the amount here would change to zero, and so we would have to set an amount for that, but the posting date should have also changed to the end of the current month. And that's how the Recurring General Journal works.”
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- By John Ocampo, Tensoft, a
