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How to manage deferrals (vendor prepayments) within Microsoft Dynamics 365 Business Central

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#amortization

#deferraltemplate

#expense

#prepaidexpenses

#vendorinvoice

Dynamics 365 Finance

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Jun 18, 2022

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  • The article discusses how to allocate expenses to the correct periods when paying a vendor for a 12-month subscription in Microsoft Dynamics 365 Business Central.
  • The solution involves setting up a prepaid expenses G/L account and a deferral template.
  • The deferral template card should be set up with the necessary information to allow for the entry of a vendor invoice that will be automatically amortized into the correct periods.
  • It is important to ensure that the accounting periods are set up before posting to avoid error messages.
  • The vendor invoice can be entered using the Purchase Invoice feature, with the deferral code selected in the line section.
  • The deferral template can be configured to defer expenses over a specific period, with the option to change the start date and recalculate the deferral schedule.
  • After previewing the posting, the Purchase Invoice can be posted, and the expenses will be recorded in the appropriate accounts.
  • Reporting tips include checking the balance sheet for the amount in the prepaid expenses account and running the Purchasing Deferral Summary report to reconcile with the general ledger.

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