Outstanding Expenses

Example: It is known in March End that a bill of 100000 will be payable for audit fee but the actual bill will come later around September.

Outstanding expenses is a liability account.

Accounting vouchers required in addition to invoice entry:

31st Mar: Purchase Account Dr, Outstanding Expenses Cr

Invoice Date: Outstanding Expenses Dr, Purchase Account Cr

Treatment 1: [when previous year entries are unavailable]

Both Accounting entries to be made manually

Treatment 2: [when previous year entries are available]

Payment purchase voucher to have facility for marking as prepaid expense.

If so, outstanding expenses shall be credited instead of cash/bank.

During invoice creation, max to allow linking with any prepaid expense voucher.

And then the reversing accounting entries will be passed.

Treatment 3: [when previous year entries are available/unavailable and amount is same]

During invoice creation, select outstanding as valuation class.

Outstanding Expenses shall be debited instead of purchase account