Setup the Non-Inventory Item (for Purchase or Resale) or your Service Item (for Purchase or Resale) to include a Deferred Expense Account and an Expense Account.
This way, you will not need to set these accounts on the Amortization Template.
Please make sure as well that the same item has a Deferred Revenue account for Revenue Recognition purposes.
1. Navigate to Transactions > Purchases/Vendors > Enter Purchase Orders.
2. Select the appropriate Vendor and the Item for resale.
3. Click Save.
4. Click the Receive button.
5. Set the Location.
6. Click Save.
7. Go back to the Purchase Order and click the Bill button.
8. Associate the item with the appropriate Amortization Journal Entry.
9. Click Save.
For example, the G/L Impact of the said bill will be as follows:
Item Rate - 750.00
Quantity - 36
Subtotal - 27,000
Deferred Expense ---------- 27,000
Accounts Payable ----------------------- 27,000
10. Navigate to Transactions > Customers > Invoice Billable Customers.
11. Select the Bill that you have created.
12. Click the Invoice link.
13. Check the fields automatically populated on the invoice - especially the Billable Items subtab. Please select the appropriate Revenue Recognition Schedule.
14. Click Save.
The G/L Impact of the said invoice will be as follows:
Item Rate - 1000.00
Quantity - 36
Subtotal - 36,000
Accounts Receivable ---------- 36,000
Deferred Revenue ----------------------- 36,000
15. Navigate to Transactions > Financial > Create Amortization Journal Entries.
16. Select the Bill created earlier.
17. Click Submit.
The G/L Impact would be:
Expense ------------- 750
Deferred Expense -------------------------- 750
**** In effect, the recognition of the Expense will be on a per month basis, parallel to the revenue recognition.
18. Navigate to Transactions > Financial > Create Revenue Recognition Journal Entries.
19. Select the Invoice created from the Bill.
20. Click Submit.
The G/L Impact would be:
Deferred Revenue ------------- 1,000
Income Account -------------------------- 1,000