Where did the accrual come from?

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Hello,

I’m new to this site, and have seen some interesting discussions so I thought to join-in!

I’ve recently completed my CIMA Cert BA and I’m a company director (it’s not an accounting business.)

Before my CIMA days I used to work with a small firm of qualified accountants to submit my Ltd company accounts.

Recently I’ve been reviewing some of the older accounts produced by the firm, signed by me, and accepted by companies house.

There are some entries in the current liabilities section which confuse me, and I’d really appreciate some guidance from those who are more experienced at this.

Under accounts falling due w/in 1 year I would list the following:

  • payables
  • accruals
  • bank loans and overdraft
  • VAT
  • employee tax and NI

Each year, the accounts produced by the firm have accruals in the region of £435-675 listed, and I have no idea what this could be for. There are no accruals stated in my extended trial balance, the company accounts are pretty simple. The only thing I can think of is that the firm is accruing for the work they are doing for my company (!), but the accrual figure never matches the amount they invoice me (the latter being lower at around £300-400/annum.)

Any ideas of where the accrual figure might come from (definitely not rent, utility bills, salary/wage, or the normal things you would accrue for)?

I would ask the firm but these accounts go back 3 years and we don’t exactly have a perfect relationship since I discovered some other mistakes they made.

Many thanks in advance to whichever kind soul decides to read this post and offer some assistance :-)

Replies (7)

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By johngroganjga
09th Apr 2017 12:19

If you give them an extended TB why can't you see the other side of the adjustment they have made to the figures?

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By Ruddles
09th Apr 2017 18:17

If, every year, an accruals figure of only £435 to £675 is much the same and assuming that it relates to the same P&L expense(s) why on earth are you bothered?

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By tom123
10th Apr 2017 07:10

Did you ever adjust your accounts so that they matched the final accounts submitted?

Are they also accruing for utilities or something, in addition to the accountancy fee?

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RLI
By lionofludesch
10th Apr 2017 07:36

A TB at the start of the subsequent year will solve all your queries.

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By Manchester_man
10th Apr 2017 13:58

Notwithstanding the fact that the accountancy invoice is usually lower than this unknown accrual, your use of an exclamation mark after your comment about them accruing for their own work suggests to me that you find this odd.

It may help to assure you that it would be perfectly normal to accrue for accountancy fees. Indeed, it would be wrong not to do so.

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By lisaknowles
13th Apr 2017 10:40

As stated, it's normal for accountancy fees to be accrued, and correct to do so as it is a cost that directly relates to that year.
This means that your mystery accrual is now down to £100-200. If it really does irk you, you should be able to find the opposing entry if you reconcile the final accounts produced back to the TB you provided. It is probably a useful exercise anyway if you are now producing the accounts yourself, as other items may have been treated differently to how you might expect if you've never gone beyond the TB yourself.
Finally, despite strained relationships, I believe that a decent accountant should provide all working papers that they have if you ask them to.

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By Briar
13th Apr 2017 13:33

Class 1A NIC on a BIK? Might be the same each year.

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