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ericadbr
October 9, 2021
Question

Spreading expense costs over financial years

  • October 9, 2021
  • 1 reply
  • 0 views

Hello everyone, hope you're doing well.

 

Question, I have purchased certain services (e.g. domain for 2 years) that was paid in one installment, however, this cost relates to two different financial periods, how do you reflect that? 

 

Many thanks,

Erica

1 reply

MichelleBh
MichelleBh
October 9, 2021

I'm doing well, @ericadbr. I hope you too. 

 

You've come to the right place for answers. Allow me to guide you on how to manage the item you purchased in QuickBooks Online.

 

To deal with this, you will need to record the cost in a split in your account. Let me give you an example to illustrate this point.

 

Let us say that during your first financial period (2021), you made six payments. You'll need to record those transactions using a Cheque. As such, the remaining payments will fall within your second financial period (2022). See the sample screenshot below for your reference. 

 

 

I'd also suggest consulting an accountant. They can provide another way to reflect the installment over your different periods. This way, we can ensure that your books are accurate at the end of the year. If you don't have an accountant yet, visit this article to find one: Find a ProAdvisor or Accountant. 

 

Additionally, check out these articles below on how to create recurring cheques and handle this in QuickBooks: 

 

 

Remember that I'm always ready to work with you again to address QuickBooks-related issues. Keep safe, Erica. 

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