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Post Info TOPIC: Pre-payments advice
Samilou67


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Pre-payments advice
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Hi I'm a little confused regarding pre-payments for insurance.

I was taught that at year end if insurance was paid monthly by direct debit then a prepayment wasn't necessary and that it would only be needed if the whole of the insurance for the year had been paid in that financial year.

However I have been asked by an accountant to post prep-payments for it for a couple of months after year end.

Does this sound correct?

Cheers, Sam



-- Edited by Samilou67 on Tuesday 8th of October 2013 03:24:30 PM

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Sam
ClawzCTR


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Yes and no... personally I dont do it either as the bill has been split down for monthly payments. If the Insurance bill went into the accounts as a payable and was paid off bit by bit then yes you would need to do prepayments.
othewise leave well alone...


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Gary

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Samilou67


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Thanks Gary, no it hadn't gone into the accounts as a payable.

Sam

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Sam
bro0010


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Sam,

When you say monthly direct debits do you mean twelve equal instalments commencing in the first month of the period of insurance cover? If not there could be something in it.  I've come across DD schedules where the year's premium is lifted in TEN equal instalments before.

HTH



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Ian

Ian Brown FCA
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Samilou67


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Hi Ian

No these are 12 monthly payments.

Thanks

Sam



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Sam
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