SageForum for UK versions of Sage 50- Help and support.

Hi,

My company deals with renting out rooms for meetings etc and I have a customer who would like to pay a lump sum of 6 months rental now.
He is currently up to date on all his payments.
Our accounting year goes from January to December so if he pays now for the next 6 months he would be paying for some months of 2019.
Would him paying now cause issues for the Auditors?
And if I invoice him it would be dated now but cover him for the next 6 months, can this be done or should I ask him to only pay to the end of the year?

I'm sorry if these questions seem weird but I thought I would ask here and see if anyone can help me.

Thanks!

The auditors will only care if the amount of the prepayment is material. If it is £1000 on a £100000 turnover then it doesn't matter.

If it does matter eg if it is £25000 out of a £50000 turnover then they will make an accrual/prepayment for it, as long as they know.

If you want to be clever, you could do a 2 month period or whatever is required to get to the end of your financial year on one invoice and then do a second invoice dated the first day of your next financial year for the rest... or better still get the periods to line up by invoicig to the end of the financial year now, then invoicing 6 months on the first day of the next year.

Hi

Further to bruce idea, it comes into play how you wish to record income in the business.

1. Invoice total 6 months and pay invoice, this then shows big increase in sales for that month. Downside of this is customer is using premises for future months and you are not showing any income for it.

2. Not sure if VAT is involved but monies received need to have VAT declared so full invoice should be posted if applicable.

3. You may need to consider balance sheet too... have you looked at ' accruals ' in nominal codes section ?

It would be best to wing an email over to auditors ( you sure you in the UK, we call them accountants..lol ) to ask how they would like it recorded.

A sage link here might help
https://my.sage.co.uk/public/help/askar ... leid=11205
Maybe forward that to auditors too.