Example: It is known in March End that a bill of 100000 will be payable for audit fee but the actual bill will come later around September.
Outstanding expenses is a liability account.
Accounting vouchers required in addition to invoice entry:
31st Mar: Purchase Account Dr, Outstanding Expenses Cr
Invoice Date: Outstanding Expenses Dr, Purchase Account Cr
Treatment 1: [when previous year entries are unavailable]
Both Accounting entries to be made manually
Treatment 2: [when previous year entries are available]
Payment purchase voucher to have facility for marking as prepaid expense.
If so, outstanding expenses shall be credited instead of cash/bank.
During invoice creation, max to allow linking with any prepaid expense voucher.
And then the reversing accounting entries will be passed.
Treatment 3: [when previous year entries are available/unavailable and amount is same]
During invoice creation, select outstanding as valuation class.
Outstanding Expenses shall be debited instead of purchase account