How to Configure Accruals in Freightools
Accrual configuration allows you to automate the calculation of financial accrual dates based on specific shipment milestones, ensuring accurate financial reporting and period closing.
What are Financial Accruals?
In accounting, accruals are adjustments for revenues that have been earned but are not yet recorded in the accounts, and expenses that have been incurred but are not yet paid.
In the world of freight forwarding, accruals ensure that costs and revenues are recognized in the same financial period as the actual transport activity, regardless of when the invoice is actually received or sent. By configuring accruals in Freightools, the system automatically calculates the "Accrual Date" for your files, allowing for more precise financial forecasting and month-end processing.
How to Manage Accrual Configuration
To set up or edit your accrual logic, follow the steps below:
1) Navigate to Service Management
- Click on the Configuration ⚙️ icon in the main navigation menu.
- Under the Service Management section, select Accrual Configuration.
- You will see a list of existing configurations. To create a new one, click the + New Accrual Configuration button.
2) Define the Service Mix and Trade
In the configuration window, you need to define which shipments this rule applies to:
- Service Mix (Multi-select): Choose one or more service types (e.g., FCL, LCL, Air, Road) that should follow this specific accrual logic.
- Service Trade (Multi-select): Select the relevant trades (e.g., Import, Export, Domestic) for this configuration.
3) Select the Accrual Date Type
The Date Type dropdown determines which shipment milestone will trigger the financial accrual. You can choose from standard milestones such as:
- ETD (Estimated Time of Departure)
- ETA (Estimated Time of Arrival)
Note: The choice usually depends on your company's accounting policy (e.g., recognizing revenue when the cargo leaves the port vs. when it arrives).
4) Save and Automate
Once you have filled in the fields:
- Click Save.
- After this setup is complete, Freightools will automatically calculate the Accrual Date within the financial entities of your shipment files based on the milestones of the selected Service Mix and Trade.
Best Practice Tip
Consistency is key. Ensure your Accrual Configuration aligns with your Finance Department's requirements for "Closing the Month." If you handle both Ocean and Air freight, you may want to create separate configurations if your Air shipments accrue on ETD while Ocean shipments accrue on ETA.