Prepaid Expenses: Schedules and QuickBooks Journal Entries

The prepaid register

Open the Prepaids app. All Prepaids is the register. Each row has a number, name, group, type, vendor, service period, total, and status. Statuses on that list include Draft and Approved. New Prepaid and Import Prepaids are on the register. The sidebar also has Awaiting My Approval, Accounting Entries, Installment Payments, Reports, Reconcile, QBO Sync Log, and Settings.

1. Open Prepaids and select All Prepaids.
2. Click New Prepaid, or Import Prepaids if the register already exists in a file.
3. Record the vendor, the amount, and the service period. A straight-line prepaid shows Straight-line as the type.
4. Leave the prepaid in Draft until the amount and dates are the ones you want on the schedule.

Amortization schedule

Open an approved prepaid and select Amortization. The schedule lists the period, beginning balance, amortization, and ending balance. The insurance example on the product screen is straight-line across the policy term. The same register can also track a retainer, a deposit, or a usage-based prepaid that draws down as invoices are applied. Do not put those on a monthly straight-line formula if the arrangement is not time-based. Reopen for Editing, Revise Contract/Policy Amount, Renew, and Write Off are the actions on an approved prepaid.

Journal entry to QuickBooks

Accounting Entries is where the amortization entry lives. The entry does not post on a timer. Approve it before it can reach QuickBooks Online or Intuit Enterprise Suite. An admin can turn on Automatically push approved entries to QuickBooks. With that setting on, the approval is what sends the entry. Confirm the journal entry in QuickBooks before you sign off the prepaid balance in Reconciliations. QBO Sync Log is the list of what was sent.

1. Approve the prepaid so the schedule is the one you will use.
2. Open Accounting Entries for the period and review the debit and the credit.
3. Approve the entry. If automatic push is off, push it from the QBO Sync Log after approval.
4. Tie the ending balance on the schedule to the prepaid account in Reconciliations.