Hi,
how do I account for monthly payments for an annual contract? For example web hosting or insurance. I have 1 invoice for each, but the payments come out each month....

Thanks in advance,
Daniel

Hi Daniel,

Although you only have one invoice, the service you receive is spread out over a number of months. And since the payments are also spread out over the same period, the simplest way to record the payments is as a monthly Money Paid Out transaction with the Type field set to 'General Payment' and allocated to an appropriate expense account. That is, from an accounting perspective you treat it as though you had monthly invoices instead of a single invoice.

Regards

Hi Daniel,

Of course there is another way. Enter the Purchase Invoice when you receive it, then make regular payments of the invoice once a month. This is particular helpful if you are VAT registered and not on the cash accounting method as you can claim the VAT back as one lump sum when you receive the invoice.