Find this screen
Open: Nominal > Enter Transactions > Prepayment Journal Entry
How to
Enter a prepayment
Open: Nominal > Enter Transactions > Prepayment Journal Entry
- Enter the details of the initial transaction. This posts the total value of the expense to the balance sheet.
- Prepayment Date: Date of the initial transaction.
- Total value: For the initial transaction.
- Reference and Narrative : For all the transactions.
- Specify the Transaction Analysis code, if required.
- Choose the nominal account for Balance Sheet postings. This defaults to the
- Choose the nominal account for Profit and Loss postings. This is usually the same nominal account as the
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Enter the Date and Value for each required periodic transaction.
The total value of the periodic transactions must equal the Total value of the
The routine suggests tomorrow as the first periodic date, plus dates for each subsequent posting at regular intervals.
- To save and post all the transactions, click Post.
Useful info
Set up a nominal account for prepayments
To set up your
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Create a nominal account to hold your prepayment and post the periodic transactions from.
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Set this as the default nominal account for
Open: Nominal > Create and Amend Accounts > Create New Nominal Accounts.
- Enter a Code and Name.
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Choose a report category.
This should have a type of
Open: Settings > Cash Book / Nominal Ledger > Default Nominal Accounts.
- Select the Balance Sheet tab
- Enter the code for the
Applying a prepayment
To apply a prepayment you:
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Post the payment that is to be accounted across a number of periods. You could post this as a:
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Purchase invoice and a payment to a supplier account.
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Cash (nominal) payment (with or without VAT).
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Enter the prepayment. When you enter the prepayment you must specify:
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The date on which the payment was made and its amount.
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The Balance Sheet nominal account that will temporarily hold the transaction. If you have a default prepayments nominal account specified Sage 200 will automatically display this to you.
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The Profit and Loss nominal account into which the payment amount will be posted over the course of the prepayment period.
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The number, amount and date of individual payments to be posted to the Profit and Loss nominal account.
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The company receives its rent bill in January to cover the next six months. The total cost is £6000. There is a supplier record for the landlord so the payment is recorded as a supplier purchase payment.
A prepayment journal is then set up to spread the rent expense over the six periods January to June. The following details are entered on the Create Prepayment Journal Entry screen:
| Field Name | Entry made | Note |
|---|---|---|
| Prepayment date | 10/01/2014 | This is the date on which the rent payment was posted to the landlord's supplier account. |
| Total value | £6000 | The total paid for six month's rent. |
| Balance Sheet (Posting Account) | 1103 - Prepayments |
This is the Balance Sheet nominal account from which the periodic transaction will be taken. There was no need to select a nominal account here as a default had been set for prepayments. Sage 200 automatically displays it in this field. |
| Profit and Loss | 7100 - Rent | This is the nominal account on the Profit and Loss to which the periodic expense transactions will be posted. |
| Periodic Transactions | 6 X £1000 transactions dated to post each month |
These are the dates on which the periodic transactions will be posted from the Balance Sheet nominal account to the Profit and Loss nominal account. The first posts on 10/01/2014 (the same date the prepayment was made) and the final posts on the 10/06/2014. |
The result of applying the prepayment in this scenario
The Profit and Loss will show a £1000 increase for each month of the prepayment period instead of a single £6000 payment in January.
What happens when
I post a prepayment?
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An
Nominal Account Debit Credit (Balance sheet)
Expense Account
(Profit and Loss)
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Period transactions are posted to the following nominal accounts:
Nominal Account Debit Credit (Balance sheet)
Expense Account
(Profit and Loss)
Note: A single URN The unique reference number assigned to a complete transaction to assist in tracing the progress of the transaction through Sage 200. This number is 12 digits long and comprises of: 3 digits for the user number, 2 digits for the source module in which the transaction was created, and a 7 digit sequential reference number. is applied to all the transactions.