An event that runs across a month end
Which month an event's income and costs belong to when it runs across a month end, and how to use till days, journals and month closes to get it right.
By Achekam · · 5 min read · For Events businesses in South Africa, Nigeria, Kenya
Event calendars ignore accounting calendars. A three-day festival opens on the thirtieth and closes on the first. A conference runs from the last Thursday of the month into the following Saturday. A New Year's Eve party starts in one month and, by the time the last guest leaves, ends in the next.
For the organiser, it is one event with one result. For the books, it straddles two months, and each month's management accounts will be wrong unless income and costs are put in the right one. This article explains how to split an event across a month end in Achekam, and why it matters more than it seems.
Why the split matters
If all the event's income lands in one month and most of its costs in the next, the first month looks like a triumph and the second like a disaster. Neither is true. A board or an investor reading those management accounts will draw the wrong conclusions, and a lender looking at a single month's figures may too.
The principle is the accruals concept: income and costs belong to the period in which they are earned or incurred, not the period in which cash moves or invoices arrive. AccountingTools explains the accruals concept, including accrued revenue, accrued expenses and reversing entries. Applied to an event that crosses a month end, it means each day's activity belongs to the month in which that day falls, and the costs of running it follow.
Achekam's management accounts show an income statement for any chosen period beside the period before, added up from your journals. They are only as accurate as the dates on those journals, which is why the rest of this article is about dates.
Business days at the till versus calendar months
At the till, sales are grouped into business days. A branch's business day is closed by a supervisor or manager who was not a cashier that day, which freezes its Z reports, payments, VAT by rate and differences.
Every till sale that reaches the server posts a balanced journal in the same step, and the business can choose between one journal per sale and one summary journal per till session per day. Either way, the journal carries a date, and that date decides the month.
The awkward case is the last night of the month, when the bar trades past midnight. Some of that night's sales may carry the next day's date, and so fall into the next month, even though the event night belongs to the earlier one. Decide with your accountant how you want to treat a night that crosses midnight at a month end, and check the dates on the till's journals for that night after the event.
Till sales grouped by closed business day
Use the closed business days as your record of what was sold each day. For each day of the event, the closed day's Z reports give you the takings by till, and the journals give you the revenue, VAT and cost of sales in the ledger.
After the event, list the business days and the month each falls in. If the till's journals already fall in the right months, nothing more is needed on the sales side. If a late-night session landed in the wrong month, your accountant can move it with a journal, as described below.
Costs that arrive after the event
Costs are the harder half. The caterer, the security company, the sound hire firm and the venue all invoice after the event, often well into the next month. If each supplier bill is recorded on its invoice date, the event's costs drift into a month after its income.
For each significant cost, the question is simple: which days of the event did it serve? A sound hire for the whole festival is spread across the days in both months. Security for the final night belongs to the second month. Marketing done weeks before belongs to neither event month, but to the month it was incurred.
Supplier bills are recorded line by line in Achekam, and a bill without a purchase order waits for approval before it posts. Record each bill when it arrives, and deal with the timing through journals.
Journals that put income and costs in the same month
Manual journals are how you move amounts into the right month. Achekam refuses a journal that does not balance or that is dated in a closed month, and a posted journal is corrected only by a reversal.
The usual pattern for costs that arrive late:
- At the end of the first month, post a journal accruing the costs that belong to it, such as its share of sound hire and venue costs, as accrued expenses.
- In the second month, post the reversal of that journal.
- When the supplier bills are recorded, the full cost lands in the second month, the reversal takes out the first month's share, and each month ends up with its own portion.
Agree the split with your accountant before the first month closes. Profit per event, rather than per month, is covered in profit per event, and tickets sold months ahead are dealt with in presales before the event.
Closing the months in order
Months in Achekam can be soft-closed, hard-closed and locked. A closed month refuses postings from every source, and reopening a hard close needs a second approver. Before closing, the screen checks that the ledger balances and that no posting suggestions, unposted bills or unmatched bank lines are waiting.
For an event across a month end, close in this order: finish the first month's accruals, close the first month, then complete the second month once the late bills are in. Do not close the first month before the accruals are posted, because a journal dated in a closed month will be refused.
Before your next event that crosses a month end, put a note in the diary for the first working day after the event: list the event days by month, and list the suppliers still to invoice.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
