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Deferred Expenses - Prior Month Expense Catch Up

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Posted on by JH-19062145-0

We have a purchase invoice dated current month (let's say May) but the subscription started in April and runs through August. Since April is a closed period is there a way to set up a deferral that calculates the amount evenly across the 5 months but have May doubled up to include April and May expense?

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Martin Dráb 237,965 Most Valuable Professional on at

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Which D365 product are you using? The D365 brand covers quite a few things, such as Finance and Operations, Business Central or Customer Engagement.

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JH-19062145-0 4 on at

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Business Central

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DAnny3211 11,397 on at

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Hi,

Great question! In Dynamics 365 Business Central, deferral templates are typically used to spread expenses evenly across a defined period. However, handling catch-up for a closed prior period (like April) requires a bit of manual adjustment.

Here’s a suggested approach:

Set Up a Deferral Template: Create a deferral template that spans 5 months (April to August) with equal distribution.

Post Starting from May: Since April is closed, the system won’t allow posting in that period. Instead, post the full deferral starting in May.

Manual Adjustment for Catch-Up:

After posting, manually adjust the May entry to include both April and May’s portion.

This can be done by editing the General Ledger entries or creating a journal entry to reallocate the April portion to May.

Alternative: Custom Deferral Schedule:

Instead of using a template, define a custom deferral schedule where May receives a double portion (April + May), and the remaining months receive their standard share.

This approach ensures that the expense is recognized correctly without violating the closed period restrictions.

Let me know if this helps, and please mark the response as helpful if it answered your question.

Best regards!

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