How to purchase prepaid expense in erpnext(purchase invoice)?

We purchase some services from a supplier.actually that is prepaid expense(asset).How to add this purchase details in erpnext ?
We can not add asset account in purchase invoice because it only showing expense account.
In peach tree we did the same entry in purchase invoice and account as
prepaid expense and supplier.how can i do the same in erpnext ?

Create Advance Payment entry.
Have Purchase Invoice created based on recurring bases.
Knock-off Purchase Invoice against Payment Entry via Payment Reconciliation Tool.

Hope this helps.

I have the same problem. Kindly provide step by step solution usingthe options Available. I am a qualified accountant and familiar with other programs yet struggling with this.

There is s video on this.
https://youtu.be/J46-6qtyZ9U

Thank you. Will try it.
It look complicated.
Can’t you just make a payment. And then perform a matching (recon). All that’s not matched is automatically an asset or liability?

I think conceptually that;s what it does. It is given different names like depreciation, advance payments, prepaid expenses… :slight_smile: That is how fortune 500 companies do it as well. Standard process.
Deepak

But while purchasing we will not pay.payment entry will be done after some time

Actually i need the transaction like this

Account                         Debit        Credit

Supplier(Creditors)    100
Prepaid Expense                            100

How can i make this entry ?
This can not done in purchase invoice,because in purchase invoice we can not asset account,Prepaid expense is an asset account

Account                        Debit     Credit

Prepaid Expense        8
Expense Account                         8

On each month prepaid account will credited and expense account will be
credited.This is also we can not do purchase invoice(For recurring).Prepaid expense not accessible from purchase invoice

Payment we will not do when purchase.

Please let me know how to handle this.

Would you be able to provide a business example? Thanks

In ministry of labor we have to pay a fixed amount for one year for each employee,any work related to ministry of labor will be done by a supplier who provide this type of service

for example we will pay 1000 rupees for an employee as one year deposit,

We will purchase this service from a supplier, and amount 1000 will be a prepaid expense because the amount is for one year

in peachtree we are doing this transaction like this

on purchase invoice(payment will do later)

Account                    Debit   Credit
Supplier                                  1000
Prepaid Expense  1000

on expense entry in each month

Account                    Debit   Credit
Prepaid Expense                         83
Expense Account   83

83 expense amount for one month(83*12=1000)

How i can do this entry in erpnext.because purchase invoice is not allowed to select asset account(prepaid expense).both transaction include this asset account,so i can not use purchase invoice module

Sorry Renju, i tried to see if there are ways it can be automated for example by creating recurring invoice. Doesnt seem there is an elegant solution for it . But since you are working for Ministry of Labor possible to get like 1-2 Cr INR and fund the foundation? :slight_smile: Just joking. Or atleast get MoL to become a *Titanium Sponsor for ERPNext? *

Ministry of Labor was just an example :slight_smile:

would you suggest any alternative way to enter above tranaction

If this pre payment is to an employee maybe this will help: