Overview

Expense amortization spreads a Payable's expense across the Accounting Periods in which it is incurred. You can create Amortization Entries directly from a Payable using the Create Amortization Entries wizard, spreading the amount over up to 60 Accounting Periods, or over more than 60 Accounting Periods with the Amortization API. This article covers the available Amortization methods, the Amortize Deferred Revenue/Expense setting, and how to amortize a Payable.

In this article:

• Amortization Methods
• Amortize Deferred Revenue/Expense Setting
• Amortizing a Payable
  • Prerequisites
  • Step 1: Open the Create Amortization Entries Wizard
  • Step 2: Enter the Term Information
  • Step 3: Review Accounting Information
  • Step 4: Preview and Create the Entries
  • Step 5: Review the Amortization Entries
• Preview Calculation Examples
• Amortization for More Than 60 Accounting Periods
  • Amortization Flow and API Articles
• Multi-Currency

Amortization Methods

The Create Amortization Entries wizard offers three Amortization methods:

• Straight Line - Prorated Monthly: The default method, which combines the Full Month and Daily methods. The first month is prorated based on the remaining days in that month, and the last month receives the remaining amount. Each month in between receives the same amount. Requires the Number of Accounting Periods and a Start Date.
• Straight Line - Full Month: The amount is divided equally among the selected number of Accounting Periods. Requires the Number of Accounting Periods and a Start Date.
• Straight Line - Daily: The amount for each period is based on the number of days in each month. Requires a Start Date and an End Date.

To see how each method calculates amounts, refer to Preview Calculation Examples.

Amortize Deferred Revenue/Expense Setting

The Amortize Deferred Revenue/Expense setting on the Enablements screen is the org-wide default for calculating the amount to amortize, in both the Create Amortization Entries wizard and the Amortization API:

• On: Only Payable Lines that post to the Default Deferred Expense GL Account are included.
• Off: The subtotal of all Payable Lines is included.

Amortizing a Payable

Prerequisites

Before you amortize expense for a Payable, confirm the following:

1. Your Payable page layout uses the correct Amortize Expense button. The button's API Name must be AcctSeed__Account_Payable__c.AcctSeed__Amortize_Expense, not AcctSeed__RecognizeExpense.
2. Accounting Periods are set up and open for the full amortization term.
3. If you plan to amortize only deferred expense lines:
   1. Navigate to Accounting Home > Accounting Setup > Configurations > Default GL Accounts.
   2. Click the pencil icon to edit and then set the Default Deferred Expense GL Account in the Revenue & Expense Amortization Details section of the screen; click Save.
   3. Then navigate to Accounting Home > Accounting Setup > Configurations > Enablements.
   4. Click the edit (pencil) icon then under Amortization Settings, enable Amortize Deferred Revenue/Expense, then save your changes.

      Note: The Amortize Default Revenue/Expense toggle in the Create Amortization Entries wizard defaults to this setting. You can change the toggle in the wizard for an individual Payable.

4. The Amortization method you want to use is active. A method displays in the wizard only when its Bindings custom metadata type record is active. To check, from Setup, enter metadata in the Quick Find box, select Custom Metadata Types, and click Manage Records next to Bindings. Then edit the method's record and select Is Active to show it, or clear it to hide it.

Step 1: Open the Create Amortization Entries Wizard

1. Navigate to Accounting Home > Create Entries > Expenses > Payables (Vendor Invoices).
2. Select any list view other than Recently Viewed.
3. Select the Payable to amortize.
4. Click Amortize Expense. The Create Amortization Entries wizard displays.
5. Select an Amortization method:
   • Straight Line - Prorated Monthly
   • Straight Line - Full Month
   • Straight Line - Daily
6. Click Next. The Term Information screen displays.

Step 2: Enter the Term Information

The Amount pre-populates with the sum of the Payable Line subtotals. Which Payable Lines are included depends on the Amortize Default Revenue/Expense toggle. For details, refer to Amortize Deferred Revenue/Expense Setting.

1. (Optional) Modify the Amount and/or Start Date.
2. (Optional) Turn the Amortize Default Revenue/Expense toggle on or off.
3. Enter the required term field for your Amortization method:
   • Straight Line - Prorated Monthly or Straight Line - Full Month: Enter the Number of Accounting Periods.
   • Straight Line - Daily: Enter the End Date.

   Note: This field is required. An error message displays if you leave it blank.

4. If you use Multi-book Accounting, select a value from the Accrual and/or Cash drop-down list:
   • If the Ledger's Accounting Method is Accrual or Cash, the drop-down list defaults to the Ledger's Accounting Method and can't be edited.
   • If the Ledger's Accounting Method is Accrual & Cash, the drop-down list displays the default value set for the Accrual and/or Cash field on the Amortization Entry object, if there is one. You can change it. To set a default value, refer to Set a Default Value for the Accrual and/or Cash Field in the Spring '25 Configuration Changes article.
5. (Optional) Enter a Description, then click Next to enter the Accounting Information, or click Preview Calculations to see them.

Step 3: Review Accounting Information

1. On the Accounting Information screen, the required Debit GL Account and Credit GL Account default from the Revenue & Expense Amortization Details section of the Default GL Accounts screen. To use a different GL Account, click X next to the default and select another GL Account.
2. (Optional) Complete any remaining fields, such as Project and Project Task.
3. Click Preview Calculations to review the calculations, or click Create Entries.

Step 4: Preview and Create the Entries

1. On Preview Calculations, review the amount for each Accounting Period. The example below uses Straight Line - Full Month.

   

2. Click Create Entries.

Step 5: Review the Amortization Entries

1. On the Payable, click the Amortization tab to view the entries. You can also navigate to Accounting Home > Create Entries > Ledger > Amortization Entries.

   

   
   

   Each Amortization Entry Name is the Payable Number followed by the Accounting Period. For example, the first entry above is AP-00007 (the Payable Number) followed by 2022-04 (the first Accounting Period).

   Note: If the Payable has a Proprietary Payable Number, the Amortization Entry Name still uses the Payable Number.

2. (Optional) Click an Amortization Entry Name to open the record and review or edit it.

   

Preview Calculation Examples

The Create Amortization Entries wizard includes links to the Payable number, Vendor name, and Ledger, and a Help link to this article. Use Preview Calculations in the wizard to review the amount for each period before you create entries.

The examples below show the Preview Calculations for each method, based on an amount of $4,000.00.

Straight Line - Prorated Monthly

The first month is prorated based on the remaining days in that month. The next four months receive the same amount, and the final month receives the remaining amount.

Straight Line - Full Month

The amount is divided equally among the periods. The final period may differ slightly, depending on the total amount.

Straight Line - Daily

The amount for each period is based on the number of days in that month. In this example, the Start Date (Issue Date) is April 15 and the End Date is August 31. April is based on its 15 remaining days, and May through August are based on the total number of days in each month.

Amortization for More Than 60 Accounting Periods

The Create Amortization Entries wizard supports up to 60 Accounting Periods. To amortize over a longer term, use the Amortization API, which supports up to 360 Accounting Periods. You can call it from Apex code or a Flow.

If successful, the Amortization method returns an AmortizationResult object that contains a list of Amortization Entry records. The method doesn't commit these records to the database, so you can inspect or modify them first. For example, you can populate a custom field or compare several scenarios before you commit. This also improves performance when the method is called from a Flow. The caller is responsible for committing the records.

For more information, refer to the Amortization Flow and API documentation:

• Amortization Flow
• Amortization Class
• AmortizationOptions Class
• AmortizationResult Class
• AmortizationPostService Class
• Amortization Entry Test Class

Multi-Currency

For foreign currency Payables (where the Payable currency differs from the Ledger currency), the Amount field in the Create Amortization Entries wizard displays the Ledger Amount from the Payable. When you click Preview Calculations, the Ledger Amount is divided across the Accounting Periods. Amortization Entries are created in the Ledger currency.

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