I signed up for a service agreement with a 12 month term where I will pay $100 a month. Google search says to:
debit a “prepaid expense” asset account and credit Accounts Payable for $1200
every month, debit “service expense” expense account and credit “prepaid expense” asset account to track expenses
for every payment, debit Accounts Payable and credit Bank Account
I’m stuck on step 1 because when I create the “prepaid expense” asset account, it doesn’t show up in Journal Entry. I know that Manager is designed to avoid using journal entries for most transactions, but I can’t figure how to do it.
Just create a purchase invoice and enter payments against it monthly. If desired, create a recurring payment to remind yourself to make the monthly payments.
Your search results demonstrate the disadvantage of relying on generic internet advice instead of Manager’s Guides.
On an accrual basis, this front-loads the entire service agreement into the first month. That’s probably not what an accrual-basis user wants or expects.
I keep seeing you and @eko refer to the Guides. I assume that means these: Guides | Manager.io. But those are like old Swiss cheese, brittle and full of dead-link holes. The chatbot option is almost useless because the AI isn’t good yet, and the caveat on the side even describes them as a “work in progress”.
You’re asking $59/month for this on the Cloud, which is the range of other commercial offerings. It’s reasonable for people to expect, at least, solid documentation or good (and not nearly so rude) help in this Forum.
The simplest way to record this transaction is to use the Payment transaction each month and record the payment when it is made. Post the payment to an appropriate expense account
We also created relevance Expense accounts in P&L for example for 8160 Insurance Property, Content and Casuality *which in our case we assigned to a group called Occupancy costs but one can put it anywhere suitable as expense.
Once per year we pay the full amount to the insurer using Payment tab and assign it to the Balance sheet account created under assets with code 1410 Insurance.
Every month we create a Journal entry where we credit the 1410 Insurance with the total amount paid under point 4 divided by 12 (monthly cost) and we debit 8160 Insurance Property, Content and Casualitywith the same amount.
Every month we clone the View screen of the Journal entry and change the date by a month.
That, of course, would depend on the actual terms of the contract. Specifically, is the full amount of the contract owed at the outset, with deferred payments? Are services specifically identified as being provided during a month? Or does the “subscriber” have the option to use as much or as little of the services during a time frame as desired (in other words, is this a retainer)? And what is the the defined accounting period?
To be clear, no one who has responded on this thread is asking anything. None of us work for NGSoftware. We are just users trying to help others. The forum is a voluntary community, and no one has any right to expect anything of other users—except civility. You have called other forum members rude, but you are the one who injected yourself into a discussion that was in response to someone else’s question.
@Flakily8674, now you are suggesting magic occurred. I assure you, no one who has responded has any ability to change the program. We are all just users. Nor has any such change been made by the developer.
Whatever you experienced, both before and after forum members offered various solutions, was a result of the inputs you had made (or not made). This is why you so often see forum moderators and other frequent contributors asking for screen shots of Edit screens. Users encountering novel (to them) situations often overlook or misunderstand key data and describe their trouble inadequately. I say this not to criticize, but to point out that when you encounter difficulty, it is only natural that you don’t realize what is important for someone else to help you navigate your way out of it. After all, if you knew enough to describe your problem adequately in words, you probably would not have the problem.
As a final note, all three suggested solutions could be perfectly valid, depending on your exact circumstances, accounting method (cash or accrual), defined accounting period, and related accounting practices.
