About prepayments and accruals

The software allows you to record and track prepayments and accruals via the balance sheet. You can easily apportion a prepayment to a series of anticipated charges over time or accrue for an anticipated expenditure, whilst maintaining asset or liability balances for the remaining prepayment or accrual value. The software generates the required journal postings to "unwind" the prepayment or accrual over its life.

• Prepayments are amounts that have been paid (for good or services) in advance of the accounting period to which they pertain, i.e. goods and services you have paid for upfront. For example, a telephone line rental is paid in advance for a quarter. The effect can now be distributed (e.g. three journals, one per month) over the quarter by setting up a prepayment.

• Accruals are amounts that have been paid (for goods or services) after the accounting period to which they pertain, i.e. goods and services you have received, but not yet been invoiced for. For example, a gas bill is paid in arrears for the quarter. The effect can now be shown incrementally over the quarter (e.g. three journals, one per month) by setting up an accrual.