Prepaid Accounts are asset accounts that track advance payments to be recognized as expenses over time. Each prepaid account links to an expense account for allocation.
On this page
Each prepaid account is an asset ledger that holds advance payments until they are recognized as expense. On create, you link an Expense Account * — the expense category used when the prepaid balance is amortized.
On Prepaid Expense, the user selects a Prepaid Ac and pays from a cash or bank account. On approve, the payment is debited to the prepaid asset account (not expense). Recognition happens later by creating an Expense that draws down the prepaid balance, moving the amount from the prepaid asset account to the linked expense account. There is no automatic scheduled amortization — each recognition is posted manually when the expense is recorded.
Use clone on the account view to copy a prepaid account setup for a similar category.
Connected reports: Expense Report, Bill Wise Expense, Account Transactions (prepaid asset and linked expense accounts), Balance Sheet (prepaid asset balance).
What are prepaid accounts?
Asset-side accounts holding prepaid expense balances until recognized through Prepaid Expense.
How is balance reduced?
Create expenses with Prepaid pay mode linked to the prepaid expense voucher.
Can I delete a prepaid account with balance?
Accounts with closing balance cannot be deleted.
How is this different from Prepaid Expense transaction?
Prepaid Accounts is the GL master. Prepaid Expense is the payment/recognition document.
Where do I see remaining prepaid?
Prepaid Expense view shows prepaid balance; Account Transactions shows GL movement.