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AP: Multiperiod Accounting

 

Multiperiod Accounting             
Meaning             
Spreading your expenses across multiple accounting periods             
This is mainly applicable for prepaid expenses - Defer these expenses and prorate across all the months             
              
Example: we have made advance payment to supplier for upcoming service and this 6,000$ belongs to next 6 months period of time             
Note: No Additional Setups are required             
Here we will use balance sheet account to store the amount             
              
Give "Accural Expenses/Asset Account" in payables invoice line level             
In distributions we can give any expense account like internet expense etc.,             
Journal Entries             
When we create Multiperiod Accounting Invoice             
"Accured Expense/Accured Clearing/Deferred Item Expense
(Parking Account)"Debit - 6,000$            
LiabilityCredit - 6,000$            
              
Expenditure Recognized/Create Payables Invoice             
Item ExpenseDebit - 1,000$            
Accured Expenses/Deferred Item Expense/Accural ClearingCredit - 1,000$            
Note: Same accounting entries will run for the rest of the months             
Run Ess Job "Create Multiperiod Accounting" at monthend             
              
Process             
1. Create payables invoice and in invoice line give "Accural Account"             
*In the distributions level we can give normal account in our example we have given insurance account.             
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
2. Run "Create Multiperiod Accounting" Job             
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
3. If you run "Create Multiperiod Accounting" Job then system will run these child jobs             
              
              
              
              
              
              
              
              
              
              
              
              
              
*Here we have run the job in july month, since we have not allocated the expenses in past months system has allocated all the amount in this current month             
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
*We can observe that in the below excel sheet when we have created multiperiod invoice entry is              
"Deferred Item Expense (Amount will be stored in
this account)"Debit            
LiabilityCredit            
              
              
              
              
              
              
*After booking expense the entry is              
Item ExpenseDebit            
Deferred Item ExpenseCredit           

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