openerp-expert-accounting team mailing list archive

[Robin St.Clair <robinstc@xxxxxxxxxx>]

Hi

I have come across this issue over the years on several continents.

Based on my experience, I prefer a generalised treatment of prepayments, 
annual payments and subscriptions.

To take a simple example - Insurance Premiums.

In the first place the invoice should be debited to a Current Asset 
Account (Insurance Prepayments) and credited to Accounts Payable 
(Creditors).
Secondly, each accounting period, an appropriate charge, usually based 
on  the period as a proportion of the total amount prepaid, is debited 
to the expense account and credited to the Prepayments account.

It then becomes a fairly simple matter to automate the required entries 
to allow for different accounting periods (weekly, monthly, quarterly, 
etc), clearing up residual balances and making adjustments where amounts 
payable are adjusted after the event.

In an ideal world prepayments by customers should be capable of being 
handled by the same processes, with appropriate flags set, similarly to 
the way some creditors ledgers are set up as mirror images of debtors 
ledgers.

It reminds me that in this day and age, any ERP software should easily 
handle weekly accounting, so any coding to cover prepayments should 
avoid fixation on monthly accounting.

Robin St.Clair


On 16/11/2013 08:28, Eric Caudal wrote:
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