Minimum Version Required: 24.11
Pre-Conditions
Companies.EnableEncompassAP = True
Companies.GeneralAccountSystem = Encompass
Purchases.TransType = Accounts
View Permission = Purchase View
Edit Permission = Purchase Cost
EditPrepaidAccountMaps.LifeInMonths <= 24
Steps
New Purchase:
The IsPrepaid flag will appear for all Purchases where TransType = Accounts
- This happens after Add Purchase in the table view workflow
- This happens on the Create Bills dashboard
When changing IsPrepaid to True, a pop up will appear to select a Prepaid Schedule
- You must select a Prepaid Schedule to select 'Yes'
- If you select 'No', you will be taken back to Purchase Edit and IsPrepaid will be flagged back to False
Once the Prepaid Schedule is selected, it appears in the Purchase View and Edit dashboards
No amortization entries will post until after Purchase Confirmation
Purchase Confirmation:
This Purchase will be Confirmed as usual
- The Prepaid Schedule can be changed on the Purchase Confirm dashboard
Once the Purchase is Confirmed, amortization entries will be created
- These entries will be in the same Journal Entry as the Purchase
- The entirety of the amortization life will be posted
UnConfirming and Confirming again will recalculate these entries
Fields And Definitions
Prepaid Amortization Account Maps:
1. Required to amortize prepaid expenses, must have at least 1 record to successfully set Purchases.IsPrepaid = True
2. Prepaid Schedule Name
Open text field for the user to name this something that makes sense (12 Month Immediate) is an example
This is what will appear on Purchase Edit
3. Company is a searchable dropdown
4. Expense Account is a searchable dropdown for the selected Company
5. Amortization Frequency
Monthly - amortization entries will post on the 1st of the month, every month, until the life in months expires
Quarterly - amortization entries will post on the 1st of the quarter (Jan/Apr/Jul/Oct) every quarter until the life in months expires
Bi-Annually - amortization entries will post bi-annually (Jan/Jul) until the life in months expires
6. Life in Months
Numerical entry that determines the duration of the amortization
Will be calculated either from Purchases.PostDate or the 1st of the month following the Purchase
7. Amortize in 1st month
Yes - first amortization entry will post on Purchases.PostDate, all other entries will post as noted above
No - first amortization entry will post on the 1st of the next period determined by Amortization Frequency
Purchases.IsPrepaid
1. Flag to enable selection of a Prepaid Schedule (Prepaid Amortization Account Maps) to amortize the expense
2. Not editable
If this is flagged by mistake, the purchase should be deleted and the user create a new purchase
3. Setting Purchases.IsPrepaid = True requires Purchases.PrepaidScheduleID = NOT NULL
4. Only selectable for Purchases.TransType = Accounts
Purchases.PrepaidSchedule
1. Selected record from Prepaid Amortization Account Maps to determine amortization details
2. Must be NOT NULL when Purchases.IsPrepaid = True
3. Can be changed until Purchase is Confirmed, including during the Purchase Confirmation workflow
Best Practices
Purchases.Total is used as the total amount ($Total)
Life in Months is used as the primary divider (LiM)
Amortization Method is used as a secondary divider (AM)
- Monthly = 1, Quarterly = 3, Bi-annually = 6
Calculation is $Total/(LiM/AM)
Example:
$Total = $12,000
Life in Months = 15
Amortization Method = Quarterly
12,000/(15/3)
12,000/5
We will get 5 amortization entries, posted every 3 months, each of $2,400