If our employees put in extra hours at work, we pay them an amount (not hourly basis, just random). What is the correct way to record this entry? This is paid on the same day of the extra hours worked from our cash register. Also, how to keep a track of overtime & normal salary separately, so that the overtime does not get reduced from the normal salary.
We receive our electricity bill once in 3-4 months, and we need to pay them all at once. As this becomes a burden to pay off in a single month, how could I keep aside or accrue this expense every month?
Create a liability account named something like Utility Accrual and an expense account named Utility Expenses. Each month, make a journal entry in an amount estimated to match the monthly portion of the bill, for example:
Do this for two months. When the actual statement comes after three months, Spend Money from your bank account. Although you don’t need to actively make this determination, because Manager does it for you, this transaction will credit the bank account and debit whichever account(s) you designate. So enter the current balance of Utility Accrual as one line item. Enter the remaining amount of the statement as another line item, allocated directly to Utility Expenses: