Skip to main content

Policies

Go Search
Home
  
Policies > Wiki Pages > Prepaid Policy Guidelines  

Prepaid Policy Guidelines

Division                

2

ADMINISTRATION AND FINANCE

Department

 

ACCOUNTS PAYABLES

 

 

PREPAID EXPENSE

Policy

 

 

 

A prepaid expense is an asset and is recorded when cash is paid.  However, the related expense will be incurred in the future as in the examples of subscriptions and memberships.  This policy will address the need to prepay an invoice beyond these cited examples.

 

Upon review of the invoice due date and is found to be prior to the fiscal year end date and the expense is for the following fiscal year, the invoice is paid by the due date but considered a prepaid expense.

 

 

Procedure

 

 

 

 

 

Invoices are to be reviewed for a due date; if the due date of the invoice is clearly for the next fiscal year, the invoice is to be paid in the proper fiscal year following established practices. Prepayment of travel expenses are allowed when the travel is to occur within thirty (30) days after a fiscal year-end closing date.

 

Upon determination of a prepaid expense, the Accounts Payable staff will proceed to voucher and issue a check to the vendor.  All identified prepaid invoices and its supporting documentation is to be separated from the mainstream and filed in a separate file for the Accounting Manager.    

 

Prepayment of travel expenses are allowed when the travel is to occur within thirty (30) days after the fiscal year end.

 

 

 

 

Approved by Vice President/Date

 

 

Approved bY Cabinet/Date

 

 

Revised Date

 

 

 

 

 

Last modified at 12/14/2011 2:29 PM  by Hoxha, Anisa