Archive / 1.14 Prepayments Received

RSS feed for this section

When should I recognize prepayments I have received in my revenue?

Your prepayments may comprise of various types – to give two examples, those you require for certain orders made and those that your clients have bought for an example in the form of gift cards. To follow up those two types in accounting, the approach is a bit different. The prepayment made for a certain […]

Prepayments – accounting for them

Accounting for prepayments is somewhat of a hassle. There’s a little bit more to it than just one entry for the expense and one for the payment made to the supplier. Initially you recognize that you made a payment through crediting your bank or cash balance. This is where you gave up something to get […]

Prepayments received is just increasing and nobody is actually asking for the service

In case you receive prepayments on a regular basis (i.e. gift cards etc.) there’s a high chance that the prepayments balance on your balance sheet is increasing and is most probably a considerable amount. I’m pretty sure that you have been wondering about what to do with this balance. Generally when you receive prepayments, you […]

You received a prepayment from your client, but were unable to provide the service at year end

Just recently we received a question about prepayments. Now imagine a situation – you received a prepayment from your client (either invoiced separately or charged as extra to compensate on extra services (like commercial space etc.), but due to whatever reasons you were unable to provide the actual service during the period or at year […]