Can anyone please clarify for me the prepayments on SAGE. I have an existing prepayment for rent which is releasing the final month in June. I have received the invoice for the period July to September dated in June. If I put it on and prepay it for 3 months I presume it will post the 1st payment this month and I will have a double lot of rent in the P & L. What is the correct way to do this. Also if I am adding some prepayment which have been controlled outside SAGE and posted in as Journals, do I reverse them all out at the end of this month and put the remaining balance on as a prepayment over the remaining term?? Hope this makes sense and that someone can give me some advice.
If you have a June invoice which is for July to September, you should prepay the whole lot. In July:
Dr Rent 1/3 Cr Prepayments
The same for August and September. The journal in September should clear out the prepayments account.
So if the invoice is for £6k, you have £6k sat on the prepayment account at the end of June. You will be releasing £2k to rent in each of July, August and September.
Thanks for the reply, I guess I would be able to do that if I was posting them manually by journals but if I put on a new invoice (IN SAGE) in June for 3 months July to Sept I put payment months as three and it will drop the first one into June will it not? Any further thoughts? Also any suggestions with the ones that have been prepayed partially and I now want to get onto the monthe end process in SAGE?
Thanks for the reply, I guess I would be able to do that if I was posting them manually by journals but if I put on a new invoice (IN SAGE) in June for 3 months July to Sept I put payment months as three and it will drop the first one into June will it not?
If you enter a June invoice and the rent is for July to September, you can post it directly to prepayments.
So far, no costs hit rent.
On 1st July, do a journal:
Dr rent
Cr prepayments
With 1/3 of the total amount.
NB I am thinking in terms of simply posting an invoice and then doing a journal for the prepayment bit. I know there's a prepayment function in Sage but I never use it. I grew up with manual records and I think double entry is hard wired in my blood!!
I have a similar query but cannot start a new topic as I am a newbie...
Been asked to post a prepayment in TAS - I just want to check that the accounts I use are the expense (in this case rent and rates) and the prepayment.
I need to make the prepayment on 31 Jan and then reverse it on 1 Feb.
Can someone please confirm the journals are as follows:
Thanks for the reply, I guess I would be able to do that if I was posting them manually by journals but if I put on a new invoice (IN SAGE) in June for 3 months July to Sept I put payment months as three and it will drop the first one into June will it not? Any further thoughts? Also any suggestions with the ones that have been prepayed partially and I now want to get onto the monthe end process in SAGE?
I came across the same problem as you last week. You will have to wait until July before doing the automatic prepayments using sage. I couldn't find anywhere to specify the dates I wanted to prepayments to start.
I hae a client whereby the are charged rent in advance
I always post the invoice to rent and then do a journal
So each month i have a 4 line journal
eg for Feb
I credit prepayments and debit rent for the January invoice i had for February rent (which in January i showed as a credit to rent and a debit to prepayments)
I debit prepayments and credit rent for the February invoice i had for march rent
It may be long winded but i just feel happier doing it this way as feel it shows the true audit trail
I've always used a spreadsheet for prepayments (and accruals), as it's far more flexible than Sage. A column for each month, and for each entry I have rows for: - Balance brought forward from previous year - Amount invoiced - Monthly charge to P&L (can be split into rows for several nominal accounts) - Then a calculated balance carried forward
I post the invoice to the P&L account*, and the invoice date and prepaid period can be totally different, including part way through a month, because the fomulas in the spreadsheet sort it all out.
At the bottom of the sheet, I then have a list of the amounts charged to each nominal code, linked to the section above, that I can copy and past into a journal spreadsheet.
Below this I have a calculation for the balance that should be on the prepayment account at the end of each month, so it's easy to reconcile.
I've also done this with a ready prepared journal spreadsheet, using a lookup to pull in the entries for the relevant month.
* Amended this bit because my brain was malfunctioning when I originally wrote it!!!!!!
-- Edited by EPF_Solutions on Wednesday 7th of May 2014 12:05:31 PM
can you email it to me please John? If at all possible or provide a link - it would be handy to have a look.
Thank you.
I know I'm not really awake at the moment, but I can't see a link to e-mail you!
I'll send it to anyone who's interested, but don't want to put it online. It's extremely ancient, in fact I may well have originally created it in the DOS version of Borland Quattro about 25 years ago! So use it to get the idea, then create your own, or make improvements!
Previous accountant at my new job applied prepayments monthly through "sage prepayments" but in the middle of accounting period (last year) he stopped posting prepayments through sage and cleared it at year-end through journal entries. Some of the prepayments are still showing in prepayments window with 3 out of 5 months shown as posted. How can I clear all the entries in prepayments window so that I can start posting new prepayments for this year?
I have often found prepayments and accruals easier via the recurring entry (bank) rather than month end procedure. This way once it is entered the update is governed by the date of recurring entry rather than just the current month end.
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
