How to Manage Deferred Expense in Odoo 18 Accounting?

Deferred expense also known as prepaid expense.We can say an example of paying the rent in advance but not used up the living space completely yet.So the other examples for deferred expenses are paying the insurance in advance or paying for the subscription in advance.How can we manage the deferred expenses in odoo 18 Accounting module.

To manage the deferred expenses we just need to set the default accounts to manage the deferred entries here you can see that deferred expenses as a default account as Prepaid expenses.

And the entries are based on the validation of the bills and we can also create the expense entries manually and group them and here we can just make computations based on the days or based on equal per month.

So let's set the calculation on the basis of the days.

Later on you can just move on to the vendors.

We can just create the bills so in the example we have discussed that the customer is going to rent a house for three months and he has just made an advance payment for the three months but the service is not yet used so the services will only be completed in the future.

Vendor is considered as the renter of the house and you can provide the bill date and accounting date and we can just add the product,here I add the House REntal service product  and once we confirm we can see the Deferred Entries.

By clicking that button you can see the deferred entries that are generated .

Computation that is based on the number of days the amount is split.You can also find it under the journal enteries.THere you can see the journal entries that are created as well as you can also find the reporting of this.

Based On Full Months:

• Change the configuration
• Select Full Months for the entry calculation
• Then create a new bill
• Add the same product House Rental
• Set the start and end date
• Then save the bill
• Tap on the smart tab named Deferred Entries

Here the same amount is credited each month to the Prepaid Expense Account.