Accruals and prepayments in the chart of accounts
Accruals and prepayments in the chart of accounts helps keep bookkeeping, control and VAT logic consistent inside the chart of accounts.
A clear place for Accruals and prepayments in the chart of accounts makes the chart of accounts much more reliable in day-to-day bookkeeping. When similar transactions land in the same accounts every time, control work, reconciliations and close reviews become easier to manage.
What is this account area used for?
- grouping similar postings in one consistent place
- separating operating activity, balance sheet logic and tax treatment
- making reconciliations, reviews and explanations easier
Common posting situations
| Situation | What is usually tracked here |
|---|---|
| Day-to-day processing | recurring transactions with the same economic meaning |
| Month-end close | accruals, reallocations or open points that need documenting |
| Review and control | balances that should be traceable to support, reports or schedules |
How it fits into the chart of accounts
- Start with Chart of accounts so the account sits in a clear overall structure.
- Use Clean up chart of accounts to decide how much detail the account really needs.
- Check the link to VAT codes in bookkeeping so VAT and close control still line up.
- Keep the connection to What is Accounting? so day-to-day posting and reporting follow the same logic.
In summary
The clearer this account area is defined, the easier it is to post, reconcile and explain the balance later.
More accounts for close work, provisions and edge cases
- Deferred tax in the chart of accounts
- Charitable donations in the chart of accounts
- Research and development costs in the chart of accounts
- Litigation provisions in the chart of accounts
- Restructuring provisions in the chart of accounts
- Contract retentions in the chart of accounts
- Rounding differences in the chart of accounts
- Small balance write-offs in the chart of accounts
- Environmental levies and recycling fees in the chart of accounts
- Franchise fees in the chart of accounts
More accounts for share schemes, tax and special liabilities
- Net pay clearing in the chart of accounts
- Share-based payment in the chart of accounts
- Employee share option schemes in the chart of accounts
- Hedging and derivative accounts in the chart of accounts
- Foreign withholding tax in the chart of accounts
- Dividend withholding tax in the chart of accounts
- Bank overdrafts in the chart of accounts
- Cash over and short in the chart of accounts
- Fines and penalties in the chart of accounts
- Customs guarantees in the chart of accounts
More contract, provision and financing accounts
- Deferred commission costs in the chart of accounts
- Contract acquisition costs in the chart of accounts
- Sales returns and allowances in the chart of accounts
- Marketplace settlement accounts in the chart of accounts
- Maintenance provisions in the chart of accounts
- Decommissioning provisions in the chart of accounts
- Restoration obligations in the chart of accounts
- Share issue costs in the chart of accounts
- Merchant cash advance liabilities in the chart of accounts
- Factoring retentions in the chart of accounts
More financing, equity and derivative accounts
- Revolving credit facilities in the chart of accounts
- Undrawn facility fees in the chart of accounts
- Convertible loan notes in the chart of accounts
- Subordinated loans in the chart of accounts
- Unpaid share capital in the chart of accounts
- Preference shares in the chart of accounts
- Capital redemption reserve in the chart of accounts
- Shareholder interest accruals in the chart of accounts
- Contingent consideration receivables in the chart of accounts
- Derivative margin accounts in the chart of accounts