Quote Originally Posted by allodial View Post
So you might appreciate this... this goes back about 2 or 3 years ago. There was an office leasing company that changed management. The guy that ran things before he was savvy about taking tax credits (*ahem*) to pay the leases. However, they went under a management change or something and now... check this out. I went through all the ropes about renting an office, I told the new chic that I wanted to get a total in writing for the entire with their estimates of monthly fees/credits for additional services, damages, use of shared materials, etc--that I intended to prepay. She told me pretty much the following:



She said it had something to do with the "home office" or something from what I recall. The gist was that they preferred to have a credit card number to bill each month than to have all $8K or so for the year. Consider how security deposits are accounted for in a program like Quickbooks (Quickbooks actually obscures accounting principles for the 'average Joe'). Prepay means they are owing you. Postpay means you are owing them. Prepay means they have an asset in their hand that triggers a liability to you. Postpay maybe means vice-versa?
You cannot pay anything because it is already paid for, all you can do is exchange one for the other. The states convert your labor hours to debt entries so you can go exchange for credit entries.
You go exchange for goods and services the receipt is the credit, it is backed by substance.. think about it. A receipt then can becomes true lawful money and can be used in credit swapping.
Bankers and brokers call this a Credit Default swap, IRS also has a procedure called Notional Principal Contracts. Prepay then becomes a remarkable tool to learn new tricks with.