Supplier invoice covering services over 2 financialy years

I would like to ask the correct procedure for inputting a supplier invoice in Quick File for services spanning 2 financial years.

Example 1

Supplier invoices my company £1000 on 31st Dec 2012 for 6 months of services
My company year end is 31st March 2013
My company pays the invoice on 31st January 2013

At year end

£500 is a p/l expense
£500 is a prepayment asset
Client is happy and paid
Bank is £1000 worse off

Example 2

Supplier invoices my company £1000 on 31st Dec 2012 for 6 months of services (same as example 1)
My company year end is 31st March 2013 (same as example 1)
My company pays the invoice very late on 30th April 2013 having used the services since 31st December

At year end

£500 is a p/l expense
£500 is a prepayment asset
Client is unhappy and is owed £1000 by my company
Bank is unchanged from this business transaction

Can you please explain the steps required to account for these two examples in Quick File? Including paying the invoice. Please indicate if it is better to use journals or your system of applying a credit (prepayment) to the supplier?

Many thanks
Robert

Book your invoice as usual and tag it paid when you pay from bank, what ever date you pay system will account for it in creditors accordingly. As far prepayment are concerned, you need to do journal as follows

Dr Prepayment (proportion of amount relevant to next year)
Cr Service exp (P&L)
(prepayment booked at year end)

Above entry would be reversed very next day of new year

1 Like

Thank you. Just the information I was looking for. In my case it applies to domain name renewal fees. Quite small amounts, but want to do it right as I have quite a few of them.