Record to report / R2R – General Accounting – Accruals

We shared some reader’s feedback on accruals.

https://faoblog.com/processes-record-report-r2r-general-accounting-accruals-4/

For large organizations, there would be a lot of transactions falling into the category of accruals. Every month there would be new contracts, which may lead to accruals.

An example, the business gives a contract for multiple sites for maintenance of coffee machines. Each contract is executed in a different month. Also, the payouts are quarterly, however for accounting, these need to be accrued each month.

There would be a lot of such contracts. So, it will not be prudent to spend on accounting resources onsite to handle these. It will make sense to move this work to a shared service center, onshore, near-shore or off-shore.

The benefit of this will accrue from consolidation to a low cost resource, comparison of contracts, attempting to provide data for negotiation, sharing of best practices.

Thus in a back office process for accruals, it is not just updating, scheduling and correcting accrual entries, but also analytics and best practice deployment which come into play.

So what will be the steps of this back office process?  Next post…..

————————————————————————————————

Have you been following our accounting blog?

https://faoblog.com/category/accounting-core/

————————————————————————————————

Subscription and Guest Post:

You may subscribe to the blog from the subscription box on the opening page of the blog. We have enabled a button on the top of the first page, which will enable you share your posts. If you wish to write about any of the current streams, you can do it at https://faoblog.com/guest-post/. We will review your post and release it within 48 hours of your posting. Please note, any irrelevant posts shall be deleted without information.