Prepaid Expense paid for fixed period

ERPNext Accounting
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1

Hi,

I would like to know how you all manage advance paid for expense which is for fixed period,

Example:
We have to pay Trade License fee 12,000/- for each year, so I paid for it for May 2017 to April 2018, where our financial year is Jan 2017 to Dec 2017.

So now in accounting year end of 2017, shows charges till December 2017 = 8,000/-,
And for 2018 opening legal charges prepaid should show 4,000/-.

How do you manage it? Is there any way to this same as auto depreciation entry?

2

Perhaps you can create a Purchase Invoice for the first month and then set it as “Recurring”, till the month expense should be booked.

https://frappe.github.io/erpnext/user/manual/en/accounts/recurring-orders-and-invoices

Hope this helps.

3

Hello Mr. Umair,

Thank you for your answer.

But solution I am looking for is when closing year,
break expense till closing fiscal month based on expend’s ending date and
balance payment should show as deposit.

For the new year,
Deposit will be deducting based on balance expense’s ending date.

Possible?

Thanks again.

4

Another approach.

  1. Create Advance Payment entry.
  2. Have Purchase Invoice created based on recurring bases.
  3. Knock-off Purchae Invoice against Payment Entry via Payment Reconciliation Tool.
  4. Till the year end, you will have balance payment which you can reconcile against the Purchase Invoice of the new fiscal year.
5

Thanks. :hugs: