Polygon Back Office allows amortisation of supplier and client invoices, dividing up large payments and distributing them into smaller transactions over a series of weeks or months. This improves the consistency of profit and loss reporting because large once off payments can be partially included in all quarters rather than being reported as one large figure. Amortisation of transactions is achieved through the prepayments feature.
Prepayments can be configured from either the Client Transaction Details form or the Supplier Transaction Details form, for non-stock invoices only. This means amortisation is not available for client invoices which include PLUs, or supplier invoices which include stock items.
From Polygon Back Office, Click on the Clients button on the toolbar, Select the Client who you would like to record prepayments for and click the Client Transactions button, Click the New button to record a new transaction.
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From Polygon Back Office, Click on the Suppliers button on the toolbar, Select the Supplier who you would like to record prepayments for and click the Supplier Transactions button Click the New button to record a new transaction.
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Follow these steps to create an amortised invoice:
•As the Prepayments button will not be available when the Stock-Invoice tick-box is ticked, the first step of creating a prepayment is to un-tick the Stock Invoice tick box (Circled in green below);
•Fill in the general invoice information such as Date, Invoice Number and Terms;
•In the Invoice Items List, record Item descriptions, and click the line item button
and next to the Code field to select a General Ledger (GL) Account for each invoice item;
•When all invoice items have been recorded, click the Prepayments button at the bottom of the form (Circled in blue below)
When the Prepayments button is clicked, the Invoice Prepayment Details form will be displayed as shown below.
Enter the following information into the Invoice Prepayments Update Form:
•Number of Periods - This indicates how many periods the payments will be spread across;
•Frequency - This indicates the frequency of these payments (either Weekly or Monthly);
•Start Date - This indicates the date which the first payment will be made.
Click OK to save these changes.
When a supplier invoice with prepayments is saved, the following general ledger transactions are recorded: •The balance of the a supplier invoice is recorded against the Accounts Payable liability account; •The amount of any GST applicable is recorded against the GST Paid liability account; •The expense portion of the invoice is recorded against the Sundry Prepayments liability account; •Then the expense portion is divided smaller amounts. These amounts are determined by dividing the expense portion by the specified Number of Periods; •The smaller amounts are recorded as a series of transactions at intervals specified in the Frequency field, and starting from the specified Start Date. These transactions are drawn from the Sundry Prepayments liability account to the GL Account(s) specified in the Supplier Invoice - Invoice Items List. These transactions can be viewed from the Supplier Transactions File by right clicking on an invoice and then selecting View Reference. This will display the transaction in the Reference Viewer form. See section Reference Viewer for more information about the reference viewer form.
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When a client invoice with prepayments is saved, the following general ledger transactions are recorded: •The balance of the a client invoice is recorded against the Accounts Receivable liability account; •The amount of any GST applicable is recorded against the GST Collected liability account; •The revenue portion of the invoice is recorded against the Sundry Prepayments Liability account; •Then the revenue portion is divided smaller amounts. These amounts are determined by dividing revenue portion by the specified Number of Periods; •The smaller amounts are recorded as a series of transactions at intervals specified in the Frequency field, and starting from the specified Start Date. These transactions are drawn from the Sundry Prepayments liability account to the GL Account(s) specified in the Client Invoice - Invoice Items List. These general ledger transactions can be viewed from the Client Transactions File by right clicking on an invoice and then selecting View Reference. This will display the transaction in the Reference Viewer form. See section Reference Viewer for more information about the reference viewer form.
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See Also:
Polygon Back Office > Client Transaction Details
Polygon Back Office > Supplier Transaction Details
Polygon Back Office > Client Transactions File
Polygon Back Office > Supplier Transactions File
Polygon Back Office > Chart of Accounts
Polygon Back Office > Reference Viewer