How to Use Yardi GL Prepayments

In the first part of our series on Yardi’s top 5 underused & useful features, we explain how you can use GL Prepayments for accrual accounting in Yardi to save time and minimise errors.

Yardi GL Prepayments for accrual accounting

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The first subject we've chosen to write about in this series on "Yardi's most underused features" is one that—if you're not using it already—you’ll find to be a complete gamechanger: GL Prepayments for accrual accounting.

The feature is available in all but the oldest versions of Yardi Voyager, but it’s often overlooked by new and older users alike. Once you start using the feature, not only will it significantly speed up the process you go through to accrue invoices, it’ll significantly reduce the chance of introducing human error into your accounting data too.

To help you realise those benefits of the GL Prepayments feature, we've written this simple guide to help you get started. I hope you find it useful.

What are Yardi GL Prepayments?

If you're reading this, I expect you're already familiar with accounting terminology. Nevertheless, it always helps to set the scene—which we’ll do with an example.

Let's say your business has ordered a window cleaning service for the three months of January, February and March. The window cleaner expects advance payment and sends you one invoice that covers all three months. You need to pay the whole invoice in January. 

However, you want your reports to reflect the payment applies to each of the months: January, February and March (not just January).

The process when not using GL Prepayments

If you're not using the GL prepayments feature in Yardi, you’d have to manually type in the "split payment" for each time period. This can be a massive duplication of effort that also increases the risk of human error – each entry is a chance to type incorrect details. (Imagine if it was a multi-year service 😣 )

The process when using Yardi GL Prepayments

By using GL Prepayments you just set up the payment once and it’ll automatically accrue payments to future time periods. Sounds good, right? You'll no longer have to replicate the payment for each individual time period. 

Instead:

• You create one Yardi GL prepayment and confirm the dates.
• Yardi creates a series of journal entries, one for each month of the selected period.

It records prepaid expenses in the balance sheet and accrues expenses in the Profit and Loss account as and when they’re accrued. Expenses can be accrued on a monthly or daily basis, and Yardi Voyager allows the mechanism to select the proration methods at the legal entity level.

The advantages of GL Prepayments in Yardi

By automating this labour-intensive process, you increase efficiency and save time when handling prepaid expenses. Yardi automates the process and removes the need to manually create journals.

The automation of the journals also eliminates human errors that often come with manual data entry (ie. mistyping). 

Now, having described the process, I’ll show you how to use it.

How to use Yardi GL Prepayments?

Important note: When processing the payable, you must ensure the “From date” and “To date” are filled out correctly. This information is required to determine which period to calculate and create the journals for.

To create the GL prepayment, go to the "International" menu:

General Ledger > Prepayments:

Enter the values in the filter fields and click "Submit" to display the payable transaction you wish to accrue.

The screen will display the list of payables that match the filter parameters. Once you’ve selected the payable you wish to accrue, click the “Calculate” button which will distribute the amounts to be accrued over the applicable months.

The screenshot below shows an example with the calculated accrual journals shown on the “Prepayments” tab, assuming a monthly proration.

As you can see, a journal was created to move £110,000 to the prepayments account. Then a journal to expense £10,000 each month until the end of the period was automatically created.

Once you’re satisfied with the journal preview, click “Create Batch” to generate and post the journals accordingly. After the journals are posted, you can export the file to Excel to share, review or file as desired.

Final thoughts

And that’s all there is to it! You’re ready to start using Yardi’s GL Prepayments. They’re a great tool to help you save time and minimise human error.

Want to learn more of Yardi’s useful but underused features? Take a look at: 

• How to use Yardi Service Contracts
• How to use Yardi Recurring Payables
• How to use Yardi Quick Charge & Overpay Cleanups
• How to use Yardi Revised Billing

If you need a hand, don’t hesitate to reach out. We’re here to help.

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With thanks to Faith Alori, TopUp alumni, for the content suggestion.