I\u2019ll be honest with you on this one \u2013 even I\u2019ve forgotten that I had accounted some expenses first off into prepayments. What I mean by this is that I had thought I\u2019d spread those expenses over the period of time I\u2019m using the service and with doing the initial entry I forgot to make those entries every month as I just forgot I had thought about distributing those expenses at all. I thought I had just expensed them once and for all at the time I made the payment to the supplier.\u00a0<\/p>\n
So what you\u2019re asking? Well, imagine my disappointment when after the year-end I\u2019m closing my accounts and seeing that I\u2019ve got a huge balance of prepayments standing there. I realized immediately what had happened and what this also meant. This meant that I had loads of expenses still to be taken away from my what I thought was a nice profit.<\/p>\n
How can you make sure this doesn\u2019t happen with you? First off think through which expenses you really wish to spread over the period and which you don\u2019t. When you\u2019ve decided on that, make a note of it into your internal accounting rules. Now, as you\u2019ve made it clear and in case you\u2019re getting those expenses you\u2019ve decided to distribute over the period, make sure you keep a list of those you\u2019ve accounted for, their monthly charge and for how long you\u2019ve got to expense them. Make this list and keep it updated. For an example I make a monthly note after I\u2019ve made my entry now. I just note down \u201cOK\u201d under each monthly charge I\u2019ve separately calculated for each balance. It\u2019s up to you and whatever works for you is the best for as long as you just ensure you\u2019ve got those balances being expensed regularly.<\/p>\n","protected":false},"excerpt":{"rendered":"
I\u2019ll be honest with you on this one \u2013 even I\u2019ve forgotten that I had accounted some expenses first off into prepayments. What I mean by this is that I had thought I\u2019d spread those expenses over the period of time I\u2019m using the service and with doing the initial entry I forgot to make […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25,65],"tags":[],"class_list":["post-3453","post","type-post","status-publish","format-standard","hentry","category-1-basic-accounting","category-1-14-prepayments-received"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=3453"}],"version-history":[{"count":2,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3453\/revisions"}],"predecessor-version":[{"id":3456,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3453\/revisions\/3456"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=3453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=3453"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=3453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}