Purchase annual Insurance, pay by DD

[MAMS005]

I’m not sure how to enter the purchase invoice of annual business insurance that costs say £240/year but is then paid via Direct Debit monthly.

[alan_mcbrien]

Usually if insurance is paid by installments there would be a credit agreement and if that is the case then pay the insurance premium in full to a new loan account “XYZ Insurance”.

Example of such a loan account, that include 2 entries when the insurance is secured; the insurance premium and the loan interest charged. The payments that you then pay through the year would be transferred with a “bank tagging rule” from your “current account” to the “loan account” that will balance to zero when all installments have been paid.

I hope this is helpful

[MAMS005]

Thanks Alan, that works very well.