{"id":8894,"date":"2023-03-30T08:26:33","date_gmt":"2023-03-30T08:26:33","guid":{"rendered":"https:\/\/docs.daftra.com\/user_manual\/%d8%aa%d9%88%d8%b2%d9%8a%d8%b9-%d9%82%d9%8a%d9%85%d8%a9-%d9%85%d8%b5%d8%b1%d9%88%d9%81-%d9%85%d8%af%d9%81%d9%88%d8%b9-%d9%85%d9%82%d8%af%d9%85%d8%a7-%d8%b9%d9%84%d9%8a-%d9%85%d8%af%d9%87-%d8%b2%d9%85\/"},"modified":"2025-04-14T13:31:19","modified_gmt":"2025-04-14T13:31:19","slug":"distributing-a-deferred-prepaid-expense-automatically-on-a-recurring-basis-through-the-system","status":"publish","type":"user_manual","link":"https:\/\/docs.daftra.com\/en\/user_manual\/distributing-a-deferred-prepaid-expense-automatically-on-a-recurring-basis-through-the-system\/","title":{"rendered":"Distributing a Deferred\/ Prepaid Expense Automatically on a Recurring Basis through the System"},"content":{"rendered":"<section class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text]We often need to record an expense paid in advance, and then distribute the value of this prepaid expense periodically to its corresponding expense account.<\/p>\n<p>Example: The rent for premises is paid in advance for a year amounting to <strong>$12,000<\/strong>,<\/p>\n<p>The journal entry would be as follows:<\/p>\n<blockquote>\n<ul>\n<li><strong>12000 from the Prepaid Rent Expense Account<\/strong><\/li>\n<li><strong>12000 to the Treasury Account<\/strong><\/li>\n<\/ul>\n<\/blockquote>\n<p>After recording the value of the prepaid expense, we need to deduct the amount for each month, which is <strong>$1,000 <\/strong>monthly, until the cost is fully charged to the monthly expenses.<\/p>\n<p>The monthly deduction entry would be as follows:<\/p>\n<blockquote>\n<ul>\n<li><strong>1000 from the Rent Expense Account<\/strong><\/li>\n<li><strong>1000 to Prepaid Rent Expense Account<\/strong><\/li>\n<\/ul>\n<p>and then repeat this process monthly until the value of the prepaid expense is exhausted.<\/p><\/blockquote>\n<p>Therefore, in the following steps, we will define how to perform this process in a recurring <strong>&#8220;automatic&#8221;<\/strong> manner through the program.[\/vc_column_text][vc_custom_heading text=&#8221;Firstly: Creating a New Treasury and Linking it to the Deferred\/ Prepaid Expense Account&#8221; font_container=&#8221;tag:h3|font_size:22|text_align:left|color:%2304306b|line_height:2&#8243; use_theme_fonts=&#8221;yes&#8221;][vc_custom_heading text=&#8221;Specifying the Routing of the Treasuries and Bank Accounts&#8221; font_container=&#8221;tag:h4|font_size:18|text_align:left|color:%2304306b&#8221; use_theme_fonts=&#8221;yes&#8221;][vc_column_text]<\/p>\n<ol>\n<li>Click on <strong>&#8220;Accounting&#8221;<\/strong> from the main menu.<a href=\"https:\/\/docs.daftra.com\/wp-content\/uploads\/2023\/03\/2023-03-29_13h09_18.tif\"><img decoding=\"async\" class=\"alignnone size-full wp-image-2512\" src=\"https:\/\/docs.daftra.com\/wp-content\/uploads\/2023\/03\/2023-03-29_13h09_18.tif\" alt=\"\" \/><\/a><\/li>\n<li>Click on <strong>&#8220;Accounting Settings&#8221;<\/strong>.<\/li>\n<li>Click on <strong>&#8220;Accounts Routing&#8221;<\/strong>.<\/li>\n<li>Select <strong>&#8220;Treasury&#8221;<\/strong> from the menu on the left side.<\/li>\n<li>Choose the type of routing <strong>&#8220;Specify per each&#8221;<\/strong> instead of <strong>&#8220;Automatic Account Routing&#8221;<\/strong> as shown below.<\/li>\n<\/ol>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-8900 size-full\" src=\"https:\/\/docs.daftra.com\/wp-content\/uploads\/2023\/03\/2023-11-30_14h31_47.png\" alt=\"\" width=\"1479\" height=\"271\" srcset=\"https:\/\/docs.daftra.com\/wp-content\/uploads\/2023\/03\/2023-11-30_14h31_47.png 1479w, https:\/\/docs.daftra.com\/wp-content\/uploads\/2023\/03\/2023-11-30_14h31_47-300x55.png 300w, https:\/\/docs.daftra.com\/wp-content\/uploads\/2023\/03\/2023-11-30_14h31_47-1024x188.png 1024w, https:\/\/docs.daftra.com\/wp-content\/uploads\/2023\/03\/2023-11-30_14h31_47-768x141.png 768w\" sizes=\"auto, (max-width: 1479px) 100vw, 1479px\" \/>[\/vc_column_text][vc_custom_heading text=&#8221;Adding a New Treasury and Linking it to the Sub-account&#8221; font_container=&#8221;tag:h4|font_size:18|text_align:left|color:%2304306b&#8221; use_theme_fonts=&#8221;yes&#8221;][vc_column_text]<\/p>\n<ol>\n<li>From the main menu, click on <strong>&#8220;Finance&#8221;<\/strong>.<\/li>\n<li>Click on <strong>&#8220;Treasures &amp; Bank Accounts&#8221;<\/strong>.<\/li>\n<li>Click on the <strong>&#8220;Add Treasury&#8221;<\/strong> button.<\/li>\n<li>In the Add Treasury screen, fill in the treasury details as follows:<\/li>\n<li><strong>Status:<\/strong> Choose &#8220;Active&#8221; to activate the treasury or &#8220;Inactive&#8221; to deactivate it.<\/li>\n<li><strong>Treasury Name:<\/strong> Write the name of the treasury as you want it to appear in the program&#8217;s lists and windows.<\/li>\n<li><strong>Description:<\/strong> Add a general description of the nature or specialty of the treasury.<\/li>\n<li><em><strong><u>Account:<\/u><\/strong> <strong><u>Delete the phrase &#8220;Default Account&#8221; and then select the sub-account specific to &#8220;Prepaid Expense Account&#8221;<\/u><\/strong>.<\/em><\/li>\n<li><strong>Permissions:<\/strong>\n<ul>\n<li><strong>Deposit:<\/strong> Select from the dropdown menu the deposit permission in the treasury for a specific employee, job role, specific branch, or all.<\/li>\n<li><strong>Withdrawal:<\/strong> Select from the dropdown menu the withdrawal permission from the treasury for a specific employee, job role, specific branch, or all.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<p>[\/vc_column_text][vc_custom_heading text=&#8221;Secondly: Adding an Expense of the Value of the Deferred\/ Prepaid Expense&#8221; font_container=&#8221;tag:h3|font_size:22|text_align:left|color:%2304306b|line_height:2&#8243; use_theme_fonts=&#8221;yes&#8221;][vc_column_text]<\/p>\n<ol>\n<li>Click on <strong>&#8220;Finance&#8221;<\/strong> from the main menu.<\/li>\n<li>Click on <strong>&#8220;Expenses&#8221;<\/strong>.<\/li>\n<li>Click on the <strong>&#8220;New Expense&#8221;<\/strong> button.<\/li>\n<li>Enter the expense data as follows:\n<ul>\n<li><strong>Amount:<\/strong>\n<ul>\n<li>Enter the value or amount of the expense.<\/li>\n<li>Select the currency of the expense voucher to be recorded.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Description:<\/strong> Enter any notes or additional guidance that describe the expense.<\/li>\n<li><strong>Code Number:<\/strong> It is a serial number that distinguishes the expense voucher, and you can change the number and control the format of the series through <strong>&#8220;<a href=\"https:\/\/docs.daftra.com\/en\/tutorial\/setting-up-auto-numbering-settings\/\" target=\"_blank\" rel=\"noopener\">Auto Numbering Settings<\/a>&#8220;<\/strong> in the account.<\/li>\n<li><strong>Date:<\/strong> Select from the calendar the date of adding the expense voucher to the system.<\/li>\n<li><b>Attachments:<\/b> You can attach a picture of the expense by clicking the <strong>&#8220;Upload&#8221;<\/strong> button and selecting the picture from your device, or through drag and drop.<\/li>\n<li><strong>Received By:<\/strong> Select the recipient of the income voucher.<\/li>\n<li><strong>Category: <\/strong>Select one of the categories from the dropdown menu or add a new category for expense vouchers.<\/li>\n<li><strong>Treasury:<\/strong> Select the treasury or bank account that will issue the expense, from the treasuries or bank accounts added to the account. For more details on how to add a new treasury\/bank account, you can review the guide &#8220;<a href=\"https:\/\/docs.daftra.com\/en\/tutorial\/adding-a-treasury-bank-account-in-your-daftra-account\/\" target=\"_blank\" rel=\"noopener\"><strong>Adding a Treasury\/Bank Account<\/strong><\/a>&#8220;.<\/li>\n<li><em><strong><u>Journal Account: Select the Deferred Expense account in the &#8220;Journal Account&#8221; field, for example: Prepaid Rent Expense Account<br \/>\n<\/u><\/strong><\/em><\/li>\n<li>Click on <strong>&#8220;Add Taxes&#8221;<\/strong> to assign tax to the expense voucher if applicable.<\/li>\n<li>Select <strong>&#8220;Assign Cost Centers&#8221;<\/strong> to link all or part of the expense value with one of the cost centers in the account.<\/li>\n<\/ul>\n<\/li>\n<li>Click the <strong>&#8220;Save&#8221;<\/strong> button to issue the expense voucher.<\/li>\n<\/ol>\n<p>[\/vc_column_text][vc_custom_heading text=&#8221;Thirdly: Adding a Recurring Expense for Monthly Deduction.&#8221; font_container=&#8221;tag:h3|font_size:22|text_align:left|color:%2304306b|line_height:2&#8243; use_theme_fonts=&#8221;yes&#8221;][vc_column_text]<\/p>\n<ol>\n<li>Click on <strong>&#8220;Finance&#8221;<\/strong> from the main menu.<\/li>\n<li>Click on <strong>&#8220;Expenses&#8221;<\/strong>.<\/li>\n<li>Click on <strong>&#8220;New Expense&#8221;<\/strong>.<\/li>\n<li><strong>Ensure you choose the &#8220;Rent Expense&#8221; account, for example, in the &#8220;Journal Account&#8221; field<\/strong><\/li>\n<li><strong>In the treasury field, ensure you select the treasury that was created and linked to the Prepaid Expense account as previously explained.<\/strong><\/li>\n<li>Click on the checkbox <strong>&#8220;Recurring&#8221;<\/strong>.<\/li>\n<li>Select the duration of <strong>&#8220;Frequency&#8221;<\/strong> whether <strong>Weekly<\/strong>, <strong>Monthly<\/strong>, or <strong>Yearly<\/strong>. In the case of the example mentioned above, select <strong>&#8220;Monthly&#8221;<\/strong> recurrence to deduct the amount each month on the specified date.<\/li>\n<li>Select from the calendar the <strong>&#8220;End Date&#8221;<\/strong> at which the repetition of the expense voucher stops and the total amount of the prepaid expense has indeed been accrued.<\/li>\n<li>Click on the <strong>&#8220;Save&#8221;<\/strong> button.<\/li>\n<\/ol>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_message message_box_style=&#8221;3d&#8221; message_box_color=&#8221;alert-warning&#8221;]<\/p>\n<blockquote><p>Once you complete the previous steps, the program will monthly deduct the estimated rental expense of $1,000 each month until the end date of the recurrence is reached.<\/p><\/blockquote>\n<p>[\/vc_message][\/vc_column][\/vc_row]<\/p>\n<\/section>","protected":false},"author":17,"template":"","categories":[2118,2108,2119],"tags":[4902,4898,4901,4893,4899,4900],"class_list":["post-8894","user_manual","type-user_manual","status-publish","hentry","category-finance","category-accounting","category-expenses","tag-accrued-expense","tag-deferred-expense","tag-distributing-an-expense","tag-paid-in-advance","tag-prepaid-expense","tag-recurring-expense"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Distributing a Deferred\/ Prepaid Expense Automatically on a Recurring Basis through the System - Daftra Knowledge Base<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/docs.daftra.com\/en\/user_manual\/distributing-a-deferred-prepaid-expense-automatically-on-a-recurring-basis-through-the-system\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Distributing a Deferred\/ Prepaid Expense Automatically on a Recurring Basis through the System - Daftra Knowledge Base\" \/>\n<meta property=\"og:description\" content=\"[vc_row][vc_column][vc_column_text]We often need to record an expense paid in advance, and then distribute the value of this prepaid expense periodically to its corresponding expense account. 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