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A prepaid expense is an expense that has been paid for in advance but not yet incurred. In business, a prepaid expense is recorded as an asset on the balance sheet that results from a business making advanced payments for goods or services to be received in the future

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1. Creating a new account to separate it from other current assets GL.
    To create a new GL, kindly refer to the

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link 7.2.1.1. Adding an Account to COA

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2.  Record  Record the entry of the payment using BANK PAYMENT DOCUMENT Bank Payment, with transaction type Others.
   Fill   Fill the fields with required details.
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In At the payment details Payment Details tab, chose the new created GL PREPAID expense Prepaid Expense and the Item. refer the link to know more in detail : 6.2.2.9. Bank Payments (Other)Image Removed
The above entry will create a Journal entry of:Dr Prepaid Expense

Cr Bank 

2.                                                                Cr Bank 
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See also 6.2.2.9. Bank Payments (Other)

3. As the advances are already recorded, the expenses which will be incurred every month need (to be recognized every month) to accurately maintain the accounts. There is no direct way to do this entry, therefore, we will use this manual entry document Transaction general ledger  (You can refer the link 7.5.6. Transactions (General Ledger)) (ledger. Specify the debit and credit accounts, item.

NOTE Please use the document with caution, should be used only when advised by Hotline) and Manual cost allocation.Specify the debit and credit accounts, item.

In the Debit side, record the expense GL Expense Account, and for Credit side, choose the prepaid expense GL Prepaid Expense. fill
Fill the data as shown in the below screenshot-:
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See also 7.5.6. Transactions (General Ledger)

4. To distribute this expense, record Manual Cost Allocations.  It is created when you need to manually distribute the overhead costs or Income. In the below example, new GL is different, selected profit and loss as shown and rest of the details are same i.e. Department and expense analytics. The below case will create the entry

To access the Manual Cost Allocations list, select Accounting (the left panel) > Service Tools > Manual Cost Allocations.

DR profit Profit and loss GLLoss
CR Other Operating expense.Expense

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See also:  7.5.1. Manual Cost Allocations

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