Expenses

Spreading an expense over several months

Learn how to amortize an expense such as a prepaid rent over several periods.

How to spread an expense paid upfront

Assume you've paid 12,000 + 15% VAT = 13,800 rent upfront for 1 year and you want to spread the expense over 12 months.

Here's how you'd book it:

  1. Create an expense with the following:

    • Select Cash Expense from the side menu.
    • Date: Date you paid the rent upfront.
    • Account: Prepaid Rent. You may want to create this account in your Chart of Accounts.
    • Amount: 13,800
    • Paid through: Bank Account
    • VAT: VAT on Purchases (15%)
  2. Spread the expense monthly exclusive of VAT by creating 12 identical expenses for each month:

    • Date: date for each month you want to recognize the expense (e.g. end of each month).
    • Account: Rent. You may want to create this account in your Chart of Accounts.
    • Amount: 1,000 (= 12,000 / 12)
    • Paid through: Prepaid Rent

Use the date auto-fill feature to easily duplicate a row over several periods.

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