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Prepayments

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Jo

09 Mar, 2012 01:31 PM

I have paid insurance for the year part way through my accounting period. I have used the split function on the invoice to post part of the payment to the expense account, and the rest to prepayments. Next year how do I move the amount from prepayments to my expense account?

1. Support Staff 1 Posted by Admin on 09 Mar, 2012 03:32 PM

   

   I would normally just post to an expense account if you've paid it. The reason you might use a prepayment could be that you want to accurately show the value of your business (which assumes you'll get some of that pre-paid insurance back if you decide to wind it up).

   Unless the value paid is large I wouldn't worry about it. But yes, as time goes on you should move the prepayment account amounts into the insurance expense account. You might find it easier to add a transaction for one month, then set the repeat frequency to each month and let it do the work for you.

   Mathew

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2. Admin closed this discussion on 09 Mar, 2012 03:32 PM.