Purchases paid by instalments

If I have a purchase like an annual insurance policy, where I have one invoice but payment is by monthly instalments, is it better to represent this as one purchase invoice with lots of partial payments attached to it or as a separate purchase record for each instalment? One purchase with multiple payments is simpler but then the whole lump sum of the invoice appears as an expense in P&L from day one rather than building up gradually over the course of the year.

I’ve always logged individual invoices as per the installment amounts. Both methods would work fine, the only reason I favour the “1 invoice per Installment method” is for simplicity, say if the monthly amount changes or the policy is cancelled.

I guess the only time it would make a difference is if I were VAT registered with accrual accounting and the purchase were one that attracted VAT. One purchase with multiple payments would mean I could claim all the VAT back at the start, one purchase per instalment would spread it over several VAT returns.

That is correct although most insurance policies don’t bear any VAT to my knowledge? But if you’re on accrual VAT and you get a large invoice for which the payments are broken down then it would make sense to claim it in full.