How To: Use the Prepayment Option in Sage 50 Accounts

Prepayments deal with payments made in advance to cover several accounting periods. An example would be rent, or an insurance premium paid in advance, but covering a period after the payment is made. Prepayments allow the expenditure to be spread evenly over the period to which it refers instead of just the months when it is paid.

The Sage 50 Accounts Prepayment option is used to set up a prepayment.

The example we use here is a prepayment of £300 made every three months for rent.
The initial payment of £300 must be recorded in the usual way e.g., a bank payment, using the correct date.
We wish to spread this equally over the following three month period to which it applies.