This guide covers setting up automated prepaid expenses in ScaleXP: setting your accounts, selecting which bills to include, mapping expense accounts, adjusting cost recognition dates, and posting your prepayments journal. A prepayment moves a cost you have already been billed for out of this month’s P&L and onto the balance sheet, then releases it to the P&L across the months the cost actually covers.

Tip: For best practice in quickly setting up ScaleXP prepaid expenses, we recommend setting up a new prepaid expenses account as described in Prepaid expenses: best practices and quick start guide. If you prefer to continue using your existing account setups and are comfortable reconciling differences between the old and new methodologies, follow the setup guide below.

Note: In consolidated companies, prepaid expenses are set up and run at the subsidiary level, in line with the accounting connection.

To get started, open the Journals tab in the top menu and select Select Prepayments, then follow these steps.

1. Configure prepayment journal settings

Click the three dots (⋯) at the top right of the page and select Expense Journal Settings to set up or change your settings for expense recognition.

Read more in How to set and change expense journal settings. You only need to do this once — steps 2 to 4 are your monthly routine.

2. Select prepayments

Go to the Select prepayments page to choose which expenses you wish to include in prepayment journals.

At the top of the page you will see an alert row for each action that needs your attention — click View items at the right of a row to see further detail, and Hide items to collapse it again.

Section 1: Prepayments in this journal lists the bills and bank transactions already included in your prepayment journals — either auto-selected (see how in How to set and change expense journal settings) or selected by you previously.

Section 1 and Section 2: All other expenses together cover every bill within your filters — Section 2 lists everything not yet included.

Set filters at the top of the page to include bank transactions or accrued costs as well as bills - these are found in the Included Data filter- and to filter by account.  You can also toggle between “As Spent” and “IFRS/GAAP” views.   See As spent versus IFRS / GAAP view.   If a bill you expect to see is missing, see How to add a missing bill or cost supplier.

Hint: If you don't want filters to reset when you move off the page, use “Save filters.”

Section 2: All other expenses includes all expenses within your selected filters.  From here you can take three types of action:

• include or exclude expenses from journals;
• change expense recognition start and end dates;
• allocate an expense code to bills and other expense transactions coded to the balance sheet.
• 

Include or exclude expenses from journals

Expenses in this section are color coded as follows:

• Orange for suggested prepayments  - click to reveal detail and select for inclusion
• Blue or gray for prepayments already included
• White for expenses not included in prepayment treatment by ScaleXP

Tip: Once all items have been reviewed and marked, none will be orange — they will all be either white (not included in journals) or blue (included).

Hint: you can use the threshold (in Settings) to prevent the system from showing very small amounts for review.

Review and adjust cost recognition dates

To review and edit cost allocation dates, click a bill in Section 2 to open its invoice detail, then click on the start and end dates to change them if required.

Use the calendar to see invoice and date range detail and select the appropriate date range. Choose the appropriate service start and end dates to be used for recognizing the expense.

Allocate from balance sheet to an expense account

You can allocate at the level of supplier, bill, or line item.

• To allocate all bills from a supplier to the same account code, select that account next to the supplier name.
• To allocate bills from a single supplier to different expense accounts, use the downward arrow by the supplier name to show a list of invoices, then use the dropdown menus to select the required expense account for each invoice.
• To allocate expense accounts at invoice line level, click on each invoice to see invoice detail, then select the appropriate expense account from the dropdown menu.

3. Post your prepayments journal

When your selections are complete, click Continue to the Prepayments Journal at the top right of the page to see the financial impact on your accounts and post your journal.

For more information, see How to automate your prepaid expense journal: review and post the prepayments journal.

4. Download supporting detail for your records

• Use the Download icon at the top right, then select your desired download:
• Download this page in Excel downloads the same level of detail you see on your screen
• Download Bills provides all line item detail in a spreadsheet table
• Download Journal Detail by Month provides line level detail of journal calculations and balance sheet positions for a single selected month

Tip: Download and save in Excel to keep a record of the detail you are using for your journals.

For the full set of options, including the journal change report, see Prepaid expense download options. To run prepayments as part of your wider close checklist, see How to use ScaleXP for month end journals.

Related articles

• Prepaid expenses: best practices and quick start guide
• How to automate your prepaid expense journal: review and post the prepayments journal
• How to reconcile your prepayments balance with Xero or QuickBooks
• Why doesn't my prepayment balance sheet match?
• How to add a missing bill or cost supplier
• How to set and change expense journal settings 
• How to automate expense recognition journals in ScaleXP
• Prepaid expense download options