Large payment not spread across the year in monthly journals
under review
Steven Ayers
In the event that a large payment was repeated annually, an alert should appear to ensure the cost had been spread across the year via journal entry. So in this scenario the payment should be posted to prepayments and a journal entry for roughly 1/12th of the figure (without tax) should be in place.
Cassandra Scott
Not all businesses amortise these payments across the full FY. It could be an alert that could be triggered for specific GL codes (insurance is one that comes to mind).
It doesnt always correlate with the value of the payment, but rather the reason for the payment.
Aaron Wittman
To help understand the best way to approach this, if anyone could provide any examples of the problem and expected alert? What defines a large payment? Is it just related to types of transactions in particular accounts?
Gary Somerville
Aaron Wittman: generally invoices that come in yearly or quarterly ( eg insurance, work cover, etc)
For reporting purposes we will want to amortise these figures on a monthly basis across the period they cover.
So bill is normally posted to an Asset account (eg. prepayments) and the recurring monthly journals are set to debit the expense account.
Hope this helps
Aaron Wittman
under review