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Automatic prepayments and accruals


Sage Accounts Plus and Professional only

Prepayments and accruals are a really useful way of accounting for your regular income and outgoings so you can forecast your turnover.

Using the automatic Prepayments and Accruals options you can adjust your accounts for payments or invoices that you pay in advance or for payments you make in arrears. This ensures that you spread the amount you pay or are invoiced for over the number of months to which the payment or invoice applies. Spreading the payment or invoice value over the correct period of months gives you a more realistic picture of your monthly profits.

Tip: Automatic prepayments and accruals post as part of your month end routine and use the current software date for any postings made. Find out more

To set up a prepaymentOpen this section

In this example, we're creating a prepayment to correct a rent payment of £600 which applies to a three month period. For example, the rent is paid in January but covers the period January, February and March.

  1. Company > Nominal Ledger > Prepayments.

  2. Complete the Prepayments window:

    N/C

    Nominal code, for example, Rent.

    Details

    Details, for example Rent.

    Dept

    		 Enter a department, if required.
    Fund If you have the Charities option selected, in the Fund column choose the required fund from this list.

    Prepayment N/C

    		 Updates automatically.

    Value

    		 The total net value of the prepayment, for example, 600.00.

    Months

    Number of months for the prepayment. This can be between 2 and 12.

    Monthly Amount

    		 Updates automatically.

    Posted

    		 Updates automatically.
  1. Save > OK.

You have now created the prepayment. This is processed the next time you run the month end and select the Prepayment check box.

To set up an accrualOpen this section

In this example, we are creating an accrual for a telephone bill that we receive every three months and pay in arrears. We have estimated the charge to be £300.

  1. Company module > Nominal Ledger > Accruals.

  2. Complete the Accruals window:

    N/C

    Nominal code, for example, a telephone bill.

    Details

    Details, for example Accrual.

    Dept

    Enter a department, if required.
    Fund If you have the Charities option seleted, in the Fund column choose the required fund from this list.

    Accrual

    Updates automatically.

    Value

    The total net prepayment value, for example, 300.00.

    Months

    Number of months for the accrual. This can be between 2 and 12.

    Monthly Amount

    Updates automatically.

    Posted

    Updates automatically.
  1. Save > OK.

You have now created an accrual, this is processed the next time that you run the month end and select the Accrual check box.

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