How to defer expenses and income over several months

What is it for?

An invoice for insurance, rent or an annual subscription is paid in one go, but the expense belongs to several months. Deferral solves this: the invoice posts the whole expense to a deferred expenses account and, month by month, fiscaldoo moves that month's share to the expense account. That way each month has the expense that belongs to it.

When to use it?

• Supplier invoices covering several months (insurance, rent paid in advance, licences, annual subscriptions).
• When you need the monthly results to contain only that month's expense.
• Do not use deferral for an invoice covering a single month: it does not need a period. Pending validation by a certified accountant: from what amount and duration deferral is justified (materiality).

Where to find it?

• Mark the period: on the supplier invoice line, in Accounting › Record › Purchases › Supplier invoices, the Defer from and Defer until columns (optional: turn them on with the columns icon of the lines table).
• See and post the journal entries: Accounting › Close › Month accounting › Deferrals.

Before you start

• The profile is Accountant.
• The deferred expenses account (281 Deferred expenses) exists in the chart of accounts. Pending validation by a certified accountant: the deferred expense and deferred income accounts to use.

How to use it

1. On the supplier invoice, turn on the Defer from and Defer until columns and, on the expense line, type the first and last day of the period (in the example, six-monthly rent of €600.00 on invoice FTF/2026/00052, from 01/11/2026 to 30/04/2027). Post the invoice.
2. Open Deferrals. For each deferred invoice the list shows one Transfer to the deferral account line (the line total, on the invoice date) and one Recognition in results line per month (dated the end of the month), all in Draft. In the example, the rent generates the €600.00 transfer and six recognitions: €99.45, €102.76, €102.76, €92.82, €102.76 and €99.45, which add up to €600.00, in proportion to the days of each month.
3. Open the Transfer to the deferral account journal entry and click Post. The journal entry moves the expense from the account it was recorded on to 281 Deferred expenses: in the insurance example, D 281 Deferred expenses €1,200.00 and C 6226 Maintenance and repair €1,200.00 (OD/2026/00112).
4. (Recognitions for future months, including those for 2027, can also be posted already in November 2026, and the numbering then goes out of date order: post each month when it ends.) At the end of each month, open that month's Recognition in results journal entry and click Post: it returns the month's share to the expense. In the insurance example, the one of 31/10/2026 posts D 6226 Maintenance and repair €101.92 and C 281 Deferred expenses €101.92 (OD/2026/00113).

Expected result

• The report Review › Taxes and treasury › Deferred expenses and income shows, per period, the Amount of the line, the Recognised before the period, the Recognised in the period and the To be recognised. In the example, for the year 2026: €1,800.00, €0.00, €504.68 and €1,295.32 (after the 2026 transfer and recognition journal entries have been posted).

• The balance of account 281 Deferred expenses is the expense still to be recognised, and it goes to zero when the last recognition is posted.

• Each month only has the expense that belongs to it. The deferral journal entries are in the Miscellaneous Operations journal, linked to the source invoice (Deferred document).

• Journal entries left in Draft appear as pending in the month-end closing (Month closed card: “All entries are posted”).

Important notes

• The journal entries are created as drafts and are not posted by themselves. Post the month's ones before closing the month: the Month closed card in Close the month shows them as a failure (the screen still lets you lock, but the month is left with unposted journal entries).
• Recognition is proportional to the days in each month, so the amounts are not the same every month.
• Journal entries created before the update have their names in English (“Deferral of …”, “Recognition of …”), for example in the check warnings; those from invoices deferred today follow the language of the screen (in Portuguese, “Diferimento de …”, “Reconhecimento de …”).

Common problems

I set up the deferral and the list is empty

• What to confirm: whether the invoice is still a draft, or whether the line is missing Defer from and Defer until.
• What to do: post the invoice and fill in both dates on the line. If you fill in only one, when saving the screen says “Fill in both the start and the end of the period of the line “Seguro anual”, or leave both empty.” (tested with only Defer from and with only Defer until).