Andrew:

I like this option "...entries moving from the prepaid expense to the actual expense be part of the period end in Payables".

The challenge would be managing prepaid's, what is the activation date? Expense 100% on activation date, or expense x number of months starting on the activation date. Then there will be the odd ball that needs a manual allocation.

Ideally we would need a report that reconciles the Prepaid asset account.

Lots to think about.