Create a deferral template to recognize an expense or revenue item in future periods.
Deferral templates can be attached to entries to automate the recognition of expense (or revenues) to future periods.
In the Tell Me, enter “Deferral Templates”
1. Select “New”
2. In our example we will create a deferral template to amortize a prepayment of an annual insurance premium.
Fill in the fields as follows:
Deferral Code: Name your deferral template
Description: Provide a description for your template
Deferral Account: Typically this a Balance Sheet account; an Asset account for a prepaid expense or a Liability account for a prepaid income item
Period Desc: Use placeholder codes to automatically insert a period description
3. Your Deferral Template is ready to use!
4. Remember to Personalize your data entry window to include the Field Name “Deferral Code”
5. If we record the invoice, it will look like this:
Note, we record the expense to the insurance expense account but upon review, we see the Deferral Template takes over:
The expense is reallocated to the Prepaid account
1/12 of the expense is recorded in the current month and in each of the next 11 months
All entries will post at once when the payable is posted
**Note: If the deferral entries span past the current fiscal year, ensure the year(s) needed have been created in Accounting Periods, otherwise the entry will not save.
If you have any questions or concerns please contact us and one of our consultants would be happy to assist you.