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Expenses only paid in next fiscal year

Manuel WinterManuel Winter Member Posts: 2

hi, i have a service contract over one year where we get the service so it's an expense not revenue. the first bill will only come beginning of next fiscal year and covers also the expenses of this year. for example the bill will be over USD 5000 and USD 4000 of it will be for the service of this year. how can I enter that correctly into my accounting so that my year end reports will be correct? thanks for your help!

in Accounting Technical Support

Comments

  • KimptonKimpton Member Posts: 78 ✭✭

    Record the expense now Manuel, by creating a Bill in the Purchases tab. I recommend taking the time to fill out all the info for vendor and product/service. Make a note in the comments box describing the contract and when first invoice is due.

    This expense will be expensed on your income statement for the year by as a liability in your Accounts Payable account (a system account) until you pay it.

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