With 3, this is called an accrued expense. You book the estimated expenses of that specific month not against your accounts payable (to later reconcile against

With 3, this is called an accrued expense. You book the estimated expenses of that specific month not against your accounts payable (to later reconcile against the invoice, also in accounts receivable) but against an accrued expense account. Once you receive the invoice, you also book it against the accrued expense account to reconcile it there. This way, your bookings might look like: 1 May 2025 Debit 100.00 Utilities Credit 100.00 Accrued (utility) expenses 1 May 2025 Pre-booking May usage Debit 100.00 Utilities Credit 100.00 Accrued (utility) expenses 1 Jun 2025 Pre-booking July usage Debit 100.00 Utilities Credit 100.00 Accrued (utility) expenses 30 Jun 2025 Received the invoice for May/Jun 2025 Credit 200.00 Accounts payable Debit 200.00 Accrued (utility) expenses 6 Jul 2026 Paying off the invoice by deducting cash from the bank account and removing the payable liability Credit 200.00 Cash Debit 200.00 Accounts payable More info at https://en.m.wikipedia.org/wiki/Accrual#Accruals_in_accounting https://en.m.wikipedia.org/wiki/Accrual#Accruals_in_accounti...