We are a small flying club and insurance is a significant part of our expenses. We prepay insurance so credit a Current Asset of Prepaid Insurance, and we monthly increase an Expense account of Insurance (Accrued) and decrease the Prepaid Insurance asset.
HOWEVER, since the annual premium payment is significant, we also want to have a monthly budget contribution to a savings fund so we have enough socked away to have the cash to pay the premium when due. To do this it seems we should have an Asset of Insurance Fund and a monthly Expense of Future-Insurance-Savings, or something like that.
HOWEVER, to do both seems like we will then be double-counting the Expense because each month we will have the NON-cash expense of Insurance (Accrued) PLUS the cash Expense of Future-Insurance-Savings. So this all seems wrong because of the double-counting.
What is the right/best way to handle this?
Help will be greatly appreciated.
HOWEVER, since the annual premium payment is significant, we also want to have a monthly budget contribution to a savings fund so we have enough socked away to have the cash to pay the premium when due. To do this it seems we should have an Asset of Insurance Fund and a monthly Expense of Future-Insurance-Savings, or something like that.
HOWEVER, to do both seems like we will then be double-counting the Expense because each month we will have the NON-cash expense of Insurance (Accrued) PLUS the cash Expense of Future-Insurance-Savings. So this all seems wrong because of the double-counting.
What is the right/best way to handle this?
Help will be greatly appreciated.