Close & reporting
Prepaid schedules
Insurance premiums, software subscriptions and other costs a Canadian business pays up front spread across the months they actually cover, so one month's profit and loss does not absorb a full year's expense at once, with GST/HST on the prepayment handled at the time it is paid.
Management report
Illustrative client · August 2026
CAD
| Line | Aug | Jul | |
|---|---|---|---|
| Revenue | 142,380 | 131,904 | +10,476 |
| Cost of sales | (51,260) | (48,115) | (3,145) |
| Gross profit | 91,120 | 83,789 | +7,331 |
| Payroll | (46,300) | (45,900) | (400) |
| SoftwareNoted | (6,480) | (5,490) | (990) |
| Rent | (8,000) | (8,000) | 0 |
| Other operating | (9,215) | (9,870) | +655 |
| Net income | 21,125 | 14,529 | +6,596 |
Reviewer's note
Software is up on last month after two seats were added mid-month. Revenue includes one milestone invoice that will not repeat next month.
Illustrative. An example of the document, not a client's figures.
What typically ends up on a prepaid schedule
Annual insurance premiums, yearly software licences, prepaid rent and retainers are the most common items. The schedule lists each one with its term and monthly amortization, releases the correct amount to expense with a journal entry each month, and reconciles the prepaid asset balance back to that schedule.
GST/HST is paid up front, expense is not
The GST/HST on a prepaid item is generally paid, and the input tax credit claimed, at the time the payment is made, well before the expense itself is spread across the months it covers. Keeping the prepaid amortization schedule and the GST/HST timing separate avoids the common error of trying to spread the tax credit the same way the expense is spread.
Flagging renewals before they surprise you
Prepaid items nearing renewal or expiration are flagged in the schedule, so a twelve-month software licence or an insurance renewal does not arrive as a surprise line item in a month it was not expected.
Books, not automatically tax
A prepaid schedule affects your books, not automatically your tax treatment. Your tax preparer or the credentialed signer on your return decides how prepaid amounts are handled for tax purposes, which can differ from the book treatment.
Questions
Frequently asked questions: Prepaid schedules
Can you build a prepaid schedule from a messy history?
Yes. We work back through statements and invoices to rebuild the schedule, flagging anything we cannot confirm rather than estimating silently.
Does GST/HST get spread across the prepaid period too?
No. GST/HST is generally paid, and the input tax credit claimed, at the time the payment is made, separate from how the expense itself is amortized across the months it covers.
How often is the prepaid schedule updated?
Every month, alongside the rest of the close, so the amortized amount and the remaining balance are always current.
Will I be warned before a prepaid item renews?
Yes. Items nearing renewal or expiration are flagged in the schedule so a renewal is not a surprise.
What exactly is included in prepaid schedules?
Prepaid expense schedule listing each item, term and monthly amortization, and monthly journal entries releasing the correct amount to expense. This work runs inside Google Sheets or Excel, whichever your business already has in place, and it rolls into your regular monthly close rather than sitting off to the side as a separate, unreconciled process.
What typically ends up on a prepaid schedule?
Annual insurance premiums, yearly software licenses, prepaid rent and retainers are the most common items.
Does a prepaid schedule change my tax return?
It affects your books, not automatically your tax treatment; your tax preparer decides how prepaid amounts are handled for tax purposes.
What is included in prepaid schedules?
Prepaid schedules covers prepaid expense schedule listing each item, term and monthly amortization and monthly journal entries releasing the correct amount to expense. The exact scope is agreed and set out in writing before work starts, so you know precisely what is and is not covered before the first deliverable arrives.
How is prepaid schedules priced?
Pricing for prepaid schedules depends on your transaction volume, the software you use, and how much cleanup is needed before ongoing work starts. Current ranges are published on the pricing page, and your exact fee is confirmed in writing before anything begins.
Related services
- Close & reportingAccrualsExpenses and revenue recorded in the period they actually happen, even when the invoice or cash has not moved yet, so the month's numbers reflect that month's activity.
- Close & reportingMonth-end closeA repeatable monthly close that ties every account back to source records and hands you a finished set of financials on a predictable date each month.
Industries
Next step
Talk to the team that would run your books
A short call covers your setup, your software and what a first month would look like. You get a written scope and price after it.