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Transitory item

You can use a transitory item to make a quick distribution of costs and revenues over the periods to which they actually relate.

Content

Video

Description

You make the entry in the usual way but you indicate that Profit needs to distribute it over a number of periods. Profit will then automatically add extra journal entries once the entry is completed.

Example:

In January, you receive an expense invoice for € 1,200.00. However, this invoice really concerns the period January - June. Which is why you want to enter a cost amount of € 200.00 in each month.

For the journalising, Profit uses a suspense account for transitory items. You can only generate a transitory item if you make an enter to a cost or revenue account. The total VAT amount applies only to the first period and is not distributed.

Purchase or sales entry

Profit journalises the purchase or sales entry in the default way. As an example, the purchase entry for the above example is shown below.

Account

Debit

Credit

Cost (if necessary with a project entry)

1,200.00

 

To Creditors

 

1,200.00

Transitory items

Profit immediately makes a contra entry for the cost amount and then adds a transitory item per period. The contra entry is given the original voucher date.

Account

Debit

Credit

Transitory items suspense account

1,200.00

 

To Costs

 

1,200.00

The following journal entries arise for the months January to June. These all receive a voucher date of the first day of the period:

Account

Debit

Credit

Costs

200.00

 

To Transitory items suspense account

 

200.00

The contra entry and the transitory items are all given the original invoice number as the voucher number. This makes it easy to find all the entries, for example when applying a selection in Financial / Ledger / Financial changes.

Rounding

Profit can automatically round period amounts, for example, to hundreds. If you decide to do this, Profit rounds the period amounts downwards and enters the rounded amount per period (except for the last period). Profit enters the remainder in the last period.

Example:

In January, you receive an expense invoice for € 1,260.00. However, this invoice really concerns the period January - June.

If you do not apply rounding then Profit makes an entry of the following amount in each period: € 1,260.00 / 6 = € 210.00.

If you round to hundreds, Profit rounds the unrounded amounts downwards. The period amount is then € 200.00:

  • Profit enters an amount of € 200.00 in the months January - May. In total, Profit enters € 1,000.00 for these five months.
  • Profit enters the remainder in June: € 1,260.00 -/- € 1,000.00 = € 260.00.

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