To set up Prepayments, see this article.
For an overview of the prepayments journal, see this video.
How to write prepayment journals in ScaleXP
Once prepayments have been set up, go to Journals (top menu)> Prepaid Expense Journal (left sidebar) to see the financial impact on your accounts and post your journal.
The prepaid expenses journal page, which is downloadable, consists of the following:
- Section 1: Suggested Journal for each selected month, by account. This is calculated as Section 3 (recognised prepaid expenses) less Section 2 (bills invoiced directly to the expense account) less Section 4 (journals already made to the prepayments account). See details below.
- Section 2: Prepaid Bills as Allocated by ScaleXP. Once all bills have been allocated, this should only show balances on the income statement, not the balance sheet. All amounts allocated to dates after the report end date will be summed up and shown as prepayments in the final column of this section.
- Section 3: Bills as Coded (in accounting system) – a summary of bills identified as prepayments, shown in the month and account as originally coded in your accounting system
- Section 4: Existing Prepayment Journals (in accounting system)
- Section 5: Prepaid Bills by Supplier – this shows bills as allocated by ScaleXP, similar to Section 2 but organised by supplier rather than account code.
Section 1: Suggested Journal
The suggested journal is provided in Section 1: Suggested Journal.
This section looks only at costs identified as prepayments either in Identify Prepaid Expenses (bills to expense accounts) or where the bills are coded directly to a Prepayments balance sheet account. It also only includes bills which have been identified as impacting the time period selected (date range at top right of screen).
It summarises the amount the system believes needs to be journaled to the P&L and the Balance sheet based on:
- Bills and time periods identified as prepayments in Identify Prepaid Expenses or going to the balance sheet account, combined with account allocations in Allocate Prepaid Bills, and
- Existing journals already in your accounting system.
Where ScaleXP suggests posting a journal, use the "Post Journal" button to write the journal directly to your accounting system. The journal will post as a draft for your approval.
Section 2: Prepaid Bills as Allocated by ScaleXP
This section lists, by expense account, all the invoiced bills and line items you have identified as prepayments, allocated across the designated accounts and time periods as per the Identify Prepaid Bills and Allocate Prepaid Bills reports.
Where invoiced bills have initially been coded to a balance sheet prepayments account in your accounting system, use Allocate Prepaid Bills to identify which P&L account the cost should impact when expensed.
Total amounts to be expensed at dates after the end date of the report show in the Prepayments (Balance Sheet) column at the right side of Section 2.
Section 3: Bills as Coded (in your accounting system)
This section lists all bills identified as prepayments which have an issue date in the selected months and have been coded directly to an expense account.
These are used in conjunction with sections 2 and 4 for the calculation of the recommended journal in Section 1.
Section 4: Existing Prepayment Journals (in your accounting system)
This section lists all existing journals in your accounting system which impact your selected prepayment accounts.
Only the side of the journal which impacts the expense account is shown in this section.
These existing journals are used in the calculation of the recommended journal in Section 1.
Section 5: Prepaid Bills by Supplier
Similar to Section 2, this shows all prepaid expenses as allocated by ScaleXP; in this case, the expenses are organised by supplier rather than by allocated expense account.
Accounting system Prepayments Balance
To quickly view the amount in Prepayments in your accounting system in order to compare it to the recommended amount in Section 2, see the note below Section 4.
