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Prepayments & Accrual Schedules

Instead of using spreadsheets, it would be very handy for Xero to have prepayment & accruals schedules built-in that act similar to the Fixed Asset function.

For example, when you allocated a new invoice to the prepayment nominal, Xero would detect that transaction and add it to the schedule. At the end of the month, you access the Prepayment & Accruals screen, go to drafts, and fill out a form giving it the period with su[plier, start date, end date and number of days/weeks/months it lasts (this would determine how often a journal is created when ran). Once done, you can then run the prepayments for the month/period and it would create those journals in the frequency you have set (i.e. days = 1 journal per day or months = 1 journal per month).

For Accruals, you could press a button to create an accrual. From here, you would fill out the supplier, amount, start date, end and period (similar to the prepayments section). The Accruals can be ran from the same page as the prepayments. When the invoice relating to that accrual is added to Xero and allocated to the accruals nominal, Xero detects this & puts it in the draft section where the prepayments are. The user would then click on the draft and assign the previously set up accrual schedule to the invoice and would create a journal to release the difference at the end of the accrual schedule.

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Scott Brown shared this idea  ·   ·  Report…  ·  Admin →
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Accepted  ·  AdminKelly Munro (Community Manager, Xero) responded  · 

Hi everyone, thanks for sharing your feedback on prepayment and accrual schedules. We appreciate you explaining how important this is for your month-end processes and workflow efficiency.

I’d like you to know your idea's been carefully reviewed by our product team. They appreciate and understand the need for tracking revenue and expenditure related to prepayments and accruals, however at this time with other initiatives in the roadmap such as improving the bill creation and payment processes there are currently no plans for this in the pipeline.

We’re keeping a close account of the support in this here, and will continue to review this opportunity within future planning. If there’s any progress made I’ll be sure to share with you all, here.

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  • Amy Larfield commented  ·   ·  Report

    Also just to be clear, its also the revenue side. Unearned revenue, or revenue received in advance. For example, customer pays an annual invoice, you want to recognise 1/12th over each month.
    so Unearned revenue, prepayments, accruals. they are all different things but work exactly the same way with the connection between invoice / bill and the journals. Just didn't want to see this go live without the revenue / customer side

  • Bruce Rose commented  ·   ·  Report

    Another vote to include this. Coming from Sage to Xero and having to keep Prepayments omn XLS is a PITA. Sage have a really good recording
    model and for me like many others, it's really needed.

  • CHRISTOPHER TENG commented  ·   ·  Report

    When we invoice customer could Xero increase the upload file storage capacity so we can attach PDF files and an Excel spreadsheet together with the invoice.

  • Amy Larfield commented  ·   ·  Report

    Absolutely critical feature needed in xero. everyone has to use spreadsheets to get around this. the only people using xero that don't need this are very small businesses that operate on full cash accounting. I imagine this is a very small percentage of the xero users. I have been using xero since 2009 and this has always been my number one issue.

  • Mark Horwood commented  ·   ·  Report

    very essential feature - please develop ASAP
    Many thanks

  • Tim Burgess commented  ·   ·  Report

    Xero's usual "We see that this is a sensible and much-wanted addition, however we're going to ignore it in favour of tinkering with other changes that nobody asked for". Hope we get more useless AI integration soon!

  • Karen Down commented  ·   ·  Report

    This would make life so much easier, as has been said many times in this thread, it is time consuming and frustrating using spreadsheets and journals. If QBO can do it Xero should be able to too!

  • Svetlana Kazakova commented  ·   ·  Report

    I think a recorded video for accruals and prepayments will be useful and how it will look on the accounts after all. I worked on the system where all you do is post an invoice and the dates it covers. The system would identify the dates and would post the invoice spread among those dates evenly by itself. It would credit the cost and debit the preapyment and so on over future months.

  • Trish Shepherd commented  ·   ·  Report

    Please advise if this functionality is in development yet?

  • Zak Labanca commented  ·   ·  Report

    Dext now has a prepayment feature built in. I wouldn't hold my breath for Xero to include a feature that is actually useful or to actually listen or action anything on this forum.

    We'll just need to be happy with their priorities being a glorified search function that nobody who actually uses their product wants or needs, and updating the UI.

  • Hannah Stenner commented  ·   ·  Report

    This woud save huge amounts of time and for me it is an essential feature!

  • Alexa Rossi commented  ·   ·  Report

    I'm a new user to Xero and I'm quite shocked this isn't a feature. I know some comments mention the best way to go around this but it's still such a manual process and really takes a significant amount of time.

    The main feature lacking regarding prepayments and accruals, in my opinion, is a schedule showing the open transactions. The only reports that can be run for these two nominals at the moment is a transactional ledger. If we have any longer term accruals we have to run a transaction ledger and manually remove any in-and-out transactions that have been cleared. We should have a separate schedule which shows one line per 'invoice' and has monthly amounts in each column showing additions and deductions to the prepayment or accrual. Once the 'invoice' has been fully expensed, we can mark the prepayment or accrual as "cleared" and it will no longer show on the schedule.

    Would love to see a comment from Xero on this one as this is critical for accountants! I'm having to create my own manual schedules outside of Xero for these which is taking up a lot of time!

  • Abelardo Garcia Aguilar commented  ·   ·  Report

    I think it would be good to get the option to reconcile the ledger accounts like Prepayments and Accruals. We can mark the transactions and the corresponding reversals as cleared. So we can quickly create a schedule by filtering the uncleared transactions.
    Xero should think of providing this clearing feature which is available in QBO

  • AJ 2 Karwa commented  ·   ·  Report

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  • Bobbie Kan commented  ·   ·  Report

    Ability to:
    Apply prepayments using a user-defined settlement date rather than auto-aligning with the invoice date.

    Purpose:
    To support real-world billing scenarios where an invoice is issued in one month (e.g., June), but the client settles it via prepayment in a later month (e.g., July). The current system auto-assigns the application date to the invoice date, which distorts accounting records and revenue timing.

    Current Limitation:
    - Xero does not allow users to define a separate settlement date when applying prepayments.
    - Credit cannot be applied if the prepayment falls within a locked period, even if the application is meant for a current or future invoice.
    - For businesses following a monthly closing approach, this creates a hard block—prepayments from prior months cannot be allocated at all without unlocking the books, defeating the purpose of a proper period close.

  • Seema G commented  ·   ·  Report

    I think it would be good to get the option to reconcile the ledger accounts like Prepayments and Accruals. We can mark the transactions and the corresponding reversals as cleared. So we can quickly create a schedule by filtering the uncleared transactions.
    Xero should think of providing this clearing feature which is available in QBO.

  • David Elliott commented  ·   ·  Report

    When posting an invoice, why not ask in what period (drop-down calendars - to/from) the expense should be recognized? So, when I post an invoice for a 12-month subscription for £1,200, I choose 'from 1/6/25 to 31/5/26' and Xero drops £100 per month into the P&L account each month for 12 months. The prepayments schedule can then be reverse-engineered based on this.

  • Wesley Schrauwen commented  ·   ·  Report

    Hey Scott

    I have created a plugin specifically for this. Its called DayFive if you want to check it out its (app.DayFive.eu). I can give you a trial code to see if it fits your needs.

    Basically you would raise a Purchase order as and when you know an expense is about to take place and then it will automatically create accruals, prepayments and manual journal (including all reversals and FX conversions).

  • Amber Hawkins commented  ·   ·  Report

    That would be amazing. I only added it to important, because it is not an emergent necessity. But that would help out so much.

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