Prepaid Expense Automation
Use Case
Prepaid expenses require several manual steps every month—identifying prepaid items, creating reversal entries, preparing recognition entries, maintaining schedules, and reconciling ending balances.
This often becomes messy and time-consuming, especially when multiple prepaid items are active.
This feature solves that by:
Automatically identifying prepaid expense transactions.
Creating the reversal and monthly recognition entries.
Building the full prepaid schedule for you.
Reconciling your GL balance with the schedule every month.
Allowing you to import your ongoing prepaid schedules easily.
Once enabled, you no longer need to prepare or maintain schedules manually. Xenett takes care of the entire flow.
Video Tutorial
Activate / Configure Prepaid
You need to add the “Prepaid Expense Review” to your close before using automation.
To add it:
Go to your Monthly Close or AI Finances Review plan.
Click New → Task (or Review Point in Finances Review).
Search for Prepaid Expense Review.
Add it to your checklist.
Before automation starts, answer a few configuration questions:
Auto Entry Start Date:
The date from which Xenett should begin creating recognition entries.
Usually the day you adopt prepaid automation.
Threshold Limit:
Any transaction amount below this will NOT be treated as prepaid.
Map Accrual Account:
The account where the
Map Prepaid Account:
The account where prepaid balances will sit after reversal.
Click Activate & Start Entry to turn on automation.
How the Feature Works
1. Identifying Prepaid Expenses
Xenett automatically detects prepaid transactions on save, based on:
Keywords like “from – to”, “period”, “for the period”.
Amount greater than the threshold you set.
Expense must be posted to a P&L account.
(If you directly code it to Prepaid Expense, Xenett will ignore it.)
Once you save the expense in QuickBooks/Xero:
Xenett creates the reversal entry.
Moves the amount to the prepaid account.
Creates all monthly recognition entries including future months.
2. Automatic Schedule Creation & Reconciliation
Inside Xenett:
Go to the Prepaid Expense Review.
You’ll see the full schedule:
Vendor
Amount
Paid date
Period covered
Monthly recognition amounts
Ending balance
GL balance
Difference (reconciled automatically)
Everything stays in sync with your books without any manual work.
4. Bringing Existing Prepaid Schedules Into Xenett
If you already have active prepaids:
Click Add Schedule.
Enter the:
Transaction date
Vendor
Amount
Start and End period
Expense account
Xenett builds the full schedule for you.
Since past months are already recognized in your books:
Select only future months before clicking Add Schedule.
Xenett will post recognition entries only for the months remaining.
This prevents duplication of already-posted entries.
5. Handling Corrections
If you update the original transaction amount:
Xenett automatically updates the schedule and adjusts past/future recognition entries.If you delete a Xenett-generated entry:
Xenett deletes the reversal and recognition entries it created.
It does NOT delete your original expense transaction.
6. Review Findings
Inside Finances Review, Xenett now shows:
Whether your prepaid schedule matches the GL balance.
A clear “All Good” message if everything reconciles.
Summary
Once enabled, prepaid automation allows you to:
Enter the expense once.
Use simple keywords.
Let Xenett create all required entries.
Maintain and reconcile schedules automatically.
Bring your ongoing prepaid items under automation smoothly.
This removes all manual work around prepaid entries and ensures complete accuracy every month.