Here is a summary of the law on prepaids/cash basis:
In 1973, there was a court case Zaninovich vs. Commissioner. Zaninovich was a cash basis taxpayer and paid rent for 1974 in December of 1973 and took a deduction.
The IRS denied his deduction, saying that he should have recorded prepaid rent, because the rent was for 1974. They went to court. The court agreed, and denied the deduction. Zaninovich appealed. The 9th district court reversed the decision, saying cash basis is supposed to be simple - and deductions are allowed when paid.
This is the court case most other cash basis and prepaid questions come back to. Some use the original ruling and try to "elect" to expense their prepaids as incurred instead of paid. Since 1973, there have been a few courts that rely on the original decision, not the 9th circuit reversal, to have a prepaid IF the prepaid rent, or insurance covers more than 12 months. This is where the 12 month rule comes from. Unfortunately, this issue, when it comes down to it, it depends on which judge in which court you get.
In my opinion, I follow the 9th court decision, and the original tax code Sec. 461. Cash basis means deduct when paid, regardless of when incurred. The only exception is if it is a deposit - or Advanced Payment from your research. This is a long term asset on your balance sheet.
I agree with SoftAssist.168 - if you want to deduct the prepaid, you would consider changing your accounting method. However, you can't just change your accounting method to get the tax deduction you want (or in your case, don't want).
As recent as May 2011, another court case Lattice vs. Comissoner was denied. They were accrual and tried to change to cash basis so that they could take a deduction for expenses they paid. The court said they couldn't do that either, they needed a reason besides better tax treatment. Their request was denied.
I hope I have given you some background on the cash basis/prepaid issue here.
If you are an S-Corp and paid expenses that relate to the next 11 months, you can deduct them. If the expenses relate to rent or insurance over 12 months, deduct a part of it under 12 month rule explained above. You must be consistent, do it the same way next year to support your position. If the payment was for something where the date and scope is not clear, record it as an asset.