I have a Business rates bill for £ 2086.91 for 1 April 13 - 31 March 2014 and my customers year end is Sep 2013 so easy calculation is that 6 months of this bill is paid in advance ie £1043.46 (or £176.91pm).
But bills are always paid over 10 months so repayments are set at 1x £196.91, then 9 x £210.
Please can someone provide an idiots guide as to how to do the entries?
Thanks
Chesh
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
OR If you are using sage, post the purchase invoice to suppliers, debiting a prepayments code set up just for rates. Pay off the supplier per the bank, and do a monthly journal from prepayments to the p&l over 12 months
Hi Chesh, sorry for quick messages before, I was using my mobile.
If you have paid the bank payments directly to the rates code, you should have £1246.91 sat in there, at 30.09.13. As you say, 6 months charge is £1043.46. Therefore £203.45 is prepaid - CR rates, DR prepayments.
So, 1103 is prepayments. You can create 11030 - 11039
When creating a new nominal code -
Name "Prepayments - Rates Select Current Liabilites Select Debtors Manually type 11030 Follow the rest of the wizard
You may get a notification that its not included in your chart of accounts, but just say ok, as its easily fixed, if it actually creates any problem, which sometimes it doesnt
-- Edited by FoxAccountancyServices on Wednesday 15th of May 2013 06:20:22 PM
I was clearly being thick in the last few days (tiredness is my feeble excuse). Its just clicked so Ive just set up a spreadsheet which can now be used for all of my prepayments calculations/remind me to transfer the correct amounts. (Will attempt an accruals one on another day, haha!)
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I usually set up individual prepayment codes for each expenses, so I can clear up the rounding once the prepayment is fully released. Using a sub code, that gives you up to ten splits
It probably best to always post a supplier invoice straight to prepayments code and then set up the recurring entry. And you can recur the bank payment against the invoice too, if you're feeling reeeeally confident!
Posting bank payments straight to the P&L code for annual bills paid over 10 months can boggle the brain a bit
Haha, not quite that confident just yet! Brain is definitely boggled this week - learning all about PAYE/ how to use PAYE software, new Accounting software (cloud based - dont like it at all!!) and all about CIS. Isnt life fun! Im generally a quick learner but do get incredibly daft brain blocks occasionally.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Oooo I just tried it - what a nifty little tip. My reports do not show the breakdown of debtors and other debtors eg prepayments - would you normally split them out in the COA so they show separately? Im used to seeing the Final accounts (ex Corporate Banker!) and do recall prepayments being reported on a separate line although I was dealing with much larger companies in those days!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
