I have received an invoice 16/12/2011 for business rates for the period december 2011 to march 2012. No payment has been made yet and wont be till middle of feb.
I have entered it into the supplier account to the rates code on sage but wanted to show the costs of the rates over the 4 months. Now i cant think whether i need to use the accruals on sage or prepayments on sage.
As rent and rates is normally prepaid it has quite stumped me.
As you have entered the whole invoice in to December, you have therefore expensed the whole amount to December, thus prepaying (although not yet physically paid) Jan, Feb & March.
Yep, I agree with Kerry. Although you haven't actually paid this bill yet you still need to show that the amount is for four months. I haven't actually used the Prepayments function in Sage (my version hasn't got it) but would just journal out the amounts.
On the other hand, unless you are doing monthly management reports, this isn't really necessary (depending on when your year end is).
As you have entered the whole invoice in to December, you have therefore expensed the whole amount to December, thus prepaying (although not yet physically paid) Jan, Feb & March.
Hope this helps
Kind regards
Kerry
The underlined bit can be quite difficult to grasp to start with.
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