Prepaid Bills & Prepaid Rent

MyronD

How do I handle Prepaid Bills and Prepaid Rent, if the payments span in the following year?
Eg. My I pay my insurance for the period June 2022 and it is for one year upto June 2023
and I receive rent in advance which is paid in 2022 but the advance is for Jan & Feb 2023.
I would like my bank register to match my bank statement. Showing deductions in the payment year but I would like to see reports in 2023 to show the prepaid.

Thanks

Tom Young

If you want to "amortize" income and expenses instead of recognizing them when you pay/receive the cash, then you need to establish balance sheet Accounts in Quicken as the offset to the payment/receipt.

So for your payments, establish a generic, manual, asset Account in Quicken called "Prepaid Expenses" or something similar.  The Account will be the offset to your payment.  As you recognize the expense with the passage of time you'll make entries to this Account, reducing the balance, using the expense Category where you want to see the cost.  Eventually you'll reduce this Account to $0, until you make your next annual payment.

You'll use the same process for income received in advance, using a generic, manual, liability Account called "Deferred Revenue" or something similar. 

Handling these items this way means your bank Account will always be correct - the payment or deposit in full will be recorded - but the expense or income shows up on a Spending Report or P&L in the correct periods.