Nominal Ledger Prepayments

(Accountant Plus and Financial Controller only)

You can use the Prepayments option to adjust your accounts for payments or invoices that you have paid in advance, e.g. rent, insurance premiums, etc. This spreads the payment over the number of months to which it refers in your accounts, not just the month it is paid.

For example, if your rent payment of ú3000 covers the next six months, you can use the Prepayments option to spread the payments equally to pay ú500 in each of the six months, rather than deducting it all during the month or period of payment.

When you run your Month End Post Prepayments option, Sage Line 50 automatically transfers the monthly payment from the Prepayment nominal account to the relevant nominal account. In this way, the value of the prepayment is gradually reduced as each monthly posting is made and at the same time the value of the nominal account is gradually increased by the same amount.

When you choose the Prepayments option from the Nominal Ledger toolbar, the Prepayments window appears listing all the prepayments which have been set up, one line per prepayment.