A prepay occurs when an owner makes a payment before a corresponding charge has been recorded; for example, when an owner pays their fee on the twentieth of the month, but the fee charge is not created until the thirtieth. If there are no open charges, the funds are marked as a prepayment. The prepayment is then applied to the fee charge after the charge is created on the thirtieth of the
month.
A prepay can also occur when an owner overpays. For example, an owner owes 800 but makes a payment for 1000. Breeze pays off the existing charges and then creates a prepay for the remainder (200).
By default, prepayments are applied to the next available charge, but if you want, you can turn off the automatic application of prepayments, and apply them manually.
Setup for Prepays
Breeze comes with a default setup for prepayments: an income GL account, a liability GL account, and a charge code. The income account is for cash books, the liability account for accrual books. The charge code is linked to the income account.
To view the default accounts, go to Company Settings > Account Settings.
To view the charge code, go to Admin > Charge Codes, and click on the prepay charge code.
We recommend you use the default setup; however, if you modify the default Chart of Accounts, you might need to change these settings.
Note(s):
You can only have one prepay charge code.
The charge code is linked to the prepay income GL account, but Breeze tracks both accrual (prepay liability) and cash (prepay income) separately.
If a receipt went to prepayment accidentally, first check the Receive Payments button to see if the prepayment can be applied to open charges, rent deposits, etc. If none are available, create the charge and then use the Receive Payment Button to apply the prepayment to the charge.