Tools
Prepaid amortization schedule: monthly expense and the entry
Paste your prepaid register — one row per prepaid, or just one. You get each month's expense, the roll-forward tied to your trial balance, the current and non-current split, and the journal entry for the month you're closing.
Most prepaid calculators do one invoice at a time. At month end the question is different: does the whole register still add up to what's sitting in prepaid expenses on the trial balance? This answers that, and gives you the entry.
Runs entirely in your browser. Nothing is uploaded, nothing is stored, nothing leaves your machine.
Prepaid register
One row per prepaid, tab or comma separated, copied straight from Excel: item, amount, service start, service end (or a term in months), date paid or recorded, expense account. The last two are optional. If you leave the recorded date blank, the prepaid is treated as recorded on the day service starts. A header row is fine. Dates as 2026-01-15 or 1/15/2026 (month first, so 05/01/2026 is May 1). Amounts in US format, like 1,200.00.
How each month is calculated
Pick one of two methods. Both spread the full amount across the service period, and both round to the cent so each prepaid's months add up to its amount exactly — no plug in the last month.
| Method | How it works | When it fits |
|---|---|---|
| Equal monthly amounts | Amount ÷ number of months. The first month is the month service starts, whatever the day. An end date within three days of a whole term (Jan 1 to Jan 1, or a day short; one day for terms under three months) counts as that term, with a note. Any other period that isn't whole months is spread by actual days, so nothing is recognized before the service is delivered. | Prepaids that start on the 1st: insurance, software, annual subscriptions. |
| Actual days | Amount × days of service in the month ÷ total days of service. A service period starting on the 15th gets about half a month in its first month. | Service periods that start mid-month, short periods, or when your policy prorates by day. |
Rounding works on the running total: each month-end cumulative amount is rounded to the cent, and the month's expense is the difference from the month before. Amounts that don't divide evenly come out a cent apart from month to month rather than piling into the final month.
Paid before service starts, recorded after it starts
A prepaid paid in August for a November trade show sits in prepaid expenses at full value until November. The schedule shows it at full value with nothing amortized, status “Not started.”
The opposite happens too: an invoice for a contract that started in July gets recorded in September. Nothing is amortized before the month it's recorded, so September carries a catch-up for July and August. The tool calls these out by name, with the amount, so you can decide whether that catch-up is what you want in September or whether an earlier month should be corrected.
The roll-forward and the tie-out
Beginning balance, plus new prepaids recorded this month, less this month's amortization, gives the ending balance. Enter the prepaid balance from your trial balance and the tool shows the difference in dollars.
A difference isn't a calculation error. It means the register and the ledger disagree. The usual reasons: something was coded to prepaid expenses and never added to the register; something on the register was never booked; last month's amortization entry posted with a different amount; or the ledger amortizes on equal months while the register uses actual days. A difference that matches one item's monthly amortization usually means a missed or doubled entry.
Current and non-current
The current portion is what will be amortized in the next 12 months, computed item by item from the schedule. The rest is non-current. Most prepaids are inside 12 months, so the split matters mainly for multi-year prepayments, like the three-year hosting contract in the worked example.
What it doesn't do
It doesn't decide what should be a prepaid in the first place. Many companies expense small invoices immediately under a policy threshold; that's a policy call, not something the tool checks. It doesn't handle cancellations, refunds or a change in term. The practical approach for those is to book the change, then enter the remaining balance as a new item from the date of the change. It isn't built for leases, which have their own accounting. And it doesn't post anything: it gives you the entry to book.
A prepaid balance that ties is one less question in the monthly flux review. The free flux template flags the accounts that moved enough to need explaining; the other free tools help with the explaining.
Related: balance sheet flux analysis, where a prepaid balance that doesn't move gets asked about; true-ups, for when an estimate meets the invoice; reversing entries; and the deferred revenue schedule, the same calculation from the revenue side.
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