How do I account for a prepayment?
ExpensePlus will allow you to account for prepayments in the Adjustments Screen, and this will affect the totals on your Balance Sheet report.
This article is for churches and charities that account on an accruals basis.
In this article:
What is a prepayment
Prepayments are used where expenditure gets paid in advance. Examples include:
- a deposit for a conference venue paid in the financial year prior to when the event is taking place
- an insurance payment for the next 18 months
Learn more about creditors and debtors, including prepayments, in this blog post.
How to add a prepayment
Click on Prepayments (money we paid in advance) in the Creditors & Debtors table at the top of the screen.
Using the 'Add New Prepayment' button, record the details of the expenditure paid in advance.
The prepayment will then appear in the prepayments table on the Adjustments screen.
How to reverse a prepayment
You can reverse it out when the expenditure needs to be accounted for in a subsequent financial year, using the reverse button to the right-hand side of the table.
Note: you can only reverse a manual prepayment adjustment in full. So for example, to make 12 reversals, you need 12 prepayments.
To help you better understand the Adjustments module, please visit the module overview page here.