Insurance invoice for whole year showing under creditors

Kammedli Registered Posts: 2 New contributor 🐸
Hi there,

We are a bus tour company. We have a fleet insurance for our vehicles which we receive 1 invoice for the whole year to begin with it.
This invoice goes on our accounting system with its tax date under the Supplier account. We pay via direct debit over the months.
We don't want this total invoice showing outstanding constantly under our creditors list. How can I fix this?

Thank you




  • hollybops
    hollybops Registered Posts: 3 New contributor 🐸
    Good morning,

    Personally, I would enter the sales invoice as you normally would and pay as you normally would but post to a prepayment nominal/account for the full value.

    THEN I would set up a re-occuring journal (divide the total amount of the invoice over 12 months) i.e total invoice value is £1000.00 /12 = £83.33 PER MONTH.

    Set the journal to credit the pre- payment account each month, (as that is where the full value of your invoice is sitting and over the year we want to zero this down to a nil value) and debit a fleet insurance nominal/account so it will show the monthly payment of £ 83.33 in your P&L.

    This will zero down the balance over the year of the full cost of the invoice and will debit the correct insurance account each month for you.

  • Neillaw
    Neillaw Registered Posts: 307 Dedicated contributor 🦉
    Have you considered posting the direct debits straight from the bank as against posting the invoice to the ledger.

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