Not an answer to your Sage query, but did your accountant direct you to do this? Charity SORP rules would normally mean that you must show income when it is received, not when it is to be spent.  I doubt you would be allowed to do this, unless your funder specifically says the money is to be used in a different accounting period. 

But, if you're certain, journal the original sum into Deferred Income in the balance sheet (not prepayments).  If you've already run a year end since the original transaction, you would need to journal from the reserves account (32- -), not income (4- - -) and you may need to re-state last year's statutory accounts.  To allocate into future months, journal out of Deferred Income (2 - - -) into Income in the P&L (4 - - -).  

Hi Anita...  Many thanks for taking the time.   Brilliant answer.   . That is exactly the issue I am looking at.   Example.   I put together a bid to cover a Nurse clinic,  it covers salary for two nurses one day each week for a year.   Total, say £20,000 .   The funders award the grant and deposit £20,000 in our bank.   we post it to donations in January.   The cash is in our current account.  We pay our costs and salaries each week, from that account week by week..  The P/L shows January as a Profit...and the later months as losses.  I want to even that out by posting the Donation in January, and immediately journaling it out to a pre payment nominal ( we have created one for that) and then posting 1/12 of the total back to donations month by month.    The problem is that I'm starting this half way through some funding periods.   We posted some 'lump sums' last year that covered a number of months , but we didn't carry forward.   I dont think I can pull them through now without having to restate the accounts.     I will probably note the issue, and post it differently in future.  

I'm on zoom or mobile if I havent been clear.    Pete Taylor Second Chance Headway Centre 07392117607   [email protected]

Hi Peter. I repeat my earlier comment that under charity rules you are not allowed to do this (unlike the commercial world).  If you received the grant in December and it specifically said the activity was due to start in January, you could defer it (all) until January, but you can't defer beyond that as you have received the income in full. The unspent grant shows as restricted reserves carried forward in your statutory accounts and I always show this at the bottom of any in-year P&L to indicate use of existing funds.

This is a charity question, not a Sage one, but you should check the Charity SORP section 5 charities-sorp-frs102-2019a.pdf (publishing.service.gov.uk)

If you do go ahead and journal it, be prepared for your independent examiner or auditor to change it back at year end and it wouldn't be a prepayment (which is for expenditure), it would be deferred income.

Excellent.   looked it up!!  Which explains why our Auditors are chasing me to determine restricted funds for last year and this year.   Our accounts actually do this, (our auditors are really good, long established and have a strong reputation in the district ), its the way we use Sage that needs altering.   All good.   

Many thanks for your help..

Pete