We pay our electricity bill by DD but get a monthly bill/invoice so it's not necessary to use prepayments. If your boss only gets one bill then prepayments are a good idea.
-- Edited by buckland10 on Thursday 13th of January 2011 01:23:45 PM
I have a client who pays for his electric by month DD. I normally post this to electric each month but should I be doing it through payments so that the bills actually reconcile at some point.
This looks like it was edited quite a lot from the original post and makes my reply look rather silly! ho hum
Anyway, next query!
Is it a direct Debit of the actual billed amount or a fixed monthly amount? You need to ensure the actual charge is what goes through the P&L Account. It may be that estimated bills are provided.
i.e.
Actual charge billed Dr Light and heat Cr Electricity Prepayment
Fixed Monthly amounts
Dr Electricity Prepayment Cr Bank
note that this could actually end up as a current liability if the payments on account are too low.
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How did that happen?! I was replying to Jill's comment and my first post got replaced by the reply! My computer's been playing silly beggars all afternoon!
