I have entered into Sage all payments made to a supplier according to transactions on the bank statements, the supplier balance is now a negative figure so, in order to adjust the balance I have issued an invoice to clear the balance but this has resulted in increasing the creditors balance on the Trial Balance. the supplier has already been paid so how should I go about adjusting the new creditors figure?
I think before you do anything else you should get a list of invoices issued by the supplier and a list of payments they have received to check it against your information. It could well be that they have been overpaid and they are using the extra as a payment of account to be allocated to the next invoice. I dont think you should just be entering 'dummy' invoices so that the supplier accounts then balance - as you can see the effect shows elsewhere and then doesnt show a true reflection.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thank you for your reply.
That was the first thing I did by checking all suppliers invoices and all payments made and that's what prompted me to issue a dummy invoice to balance supplier account as there is no credit due for any invoices from the supplier.
Hi
So if you have checked all supplier invoices (from the suppliers perspective too) then surely this is an over-payment? O have I missed the point?
If its an overpayment then the best thing is to get a refund from the supplier if your client is no longer dealing with them, or leave it as a payment on account towards the next invoice (and advise the supplier thats what you are doing perhaps). I would delete the dummy invoice.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi,
I will go through every transaction again but if it's not an overpayment and the supplier were to issue an invoice against the payment then it would be the same scenario again, what I mean is that when I would enter the supplier invoice it would increase the creditors balance too and that's what I am having a problem with.
Any purchase invoice you receive will increase the creditors balance (whether its a genuinely received one or as you say a raised dummy invoice).
If it isnt an overpayment then the only logical conclusion you can draw is that there is some paperwork missing from the supplier. That is the very first think to check (with your own paperwork and with them to make sure you have it all).
If it is an overpayment then yes the next invoice will increase the creditors, but then you can link the overpayment to part of that invoice, creditors reduce, then when you pay the balance off the creditors will reduce further.
Whilst you are trying to keep your creditors in balance you also have to make sure your suppliers accounts are correct too and any related VAT control accounts if they are VAT registered. In addition be careful of dummy invoices - are you not over-inflating the purchases in an effort to just get rid of something that LOOKS wrong but not be?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I have to go through every transaction again to match all payments against invoices to make sure I have done my bit and may be refer the matter to their accountants.
"That was the first thing I did by checking all suppliers invoices and all payments made and that's what prompted me to issue a dummy invoice to balance supplier account as there is no credit due for any invoices from the supplier."
If you have checked all the supplier invoices, that the client has given you - that doesn't mean you have them all - what Jo is suggesting is that you ask that particular supplier for an activity statement, so you can check your sage to their "sage" - its very possible your client hasn't received some invoices, or has lost them. You will only know this if the supplier gives you a record of all the invoices they have issued. The activity (or transaction) statement, will show you everything the supplier has accounted for, and when you tick this up to your sage, you will probably find there are items you have no record off.
It turns out that some payments made to the supplier were for previous invoices when the client was trading under a different name and the previous bookkeeper had not done a year end and bank rec on Sage.
So I am not sure what to do now?
What would be the best way to go about it please?
It turns out that some payments made to the supplier were for previous invoices when the client was trading under a different name and the previous bookkeeper had not done a year end and bank rec on Sage. So I am not sure what to do now? What would be the best way to go about it please?
Im a wee bit confused by this one. So when the client was trading under a different name - is this now a different business? Or the same business with a different name? Because the outcomes would be completely different.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
So the trading name was a red herring by the sounds of it. So are you saying that they have made payments but the invoices from before the year end haven't been included in the books? Regardless of timing, the invoices should be able to be matched to the payments made. Have you checked your accounts software to the activity reports received?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
That's correct, the invoices before the year end haven't been included in the books, so if I were to enter invoices to update or balance out the supplier account then the creditors balance would increase and that's what I'm confused about.
Hi
So sounds like we are starting for a semi-good place in that you now have the invoices you need to link to the payments that have been made.
So - I would say get rid of the dummy invoice for starters.
Then some more questions:-
- do all the invoices you have located that have not yet been keyed all tally to the payments and would these put the account straight?
- has the Accountant actually completed the year end accounts and submitted them? Have they had your sage backup? If they havent yet done it speak to them straight away and advise that there are some invoices that need to be included....then key them and re-send the back up. Use the invoice dates as they are.
- As I suspect - you mean the Accountant has actually done the year end then you have to consider a couple of things. How much are you talking about? Is the figure material to the accounts - - if yes then speak to the Accountant to get their input/advice. If not - then key the invoices but use the keying date as the first day of the start of your financial year, and put the actual invoice date in the 'details' section with whatever else you normally key in there. Annotate the invoice so you dont have to remember what you have done! Link the payments to the invoices. The creditors figure wouldve been wrong at the year end so you keying invoices now will increase them. But then when you link the payments to those invoices this will drop back again.
- To tidy things up - speak to the Accountant about any year end adjustments they want doing and running the sage year end routine.
Hope Ive covered everything - in a bit of a rush!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
It turns out that some payments made to the supplier were for previous invoices when the client was trading under a different name and the previous bookkeeper had not done a year end and bank rec on Sage. So I am not sure what to do now? What would be the best way to go about it please?
My questions:
What is the year end?
What are the dates of the invoices that havent been posted?
Have you sent a back up to the accountant yet? If so, has he started the work?
-- Edited by FoxAccountancyServices on Tuesday 24th of March 2015 12:45:01 PM
That's correct, the invoices before the year end haven't been included in the books, so if I were to enter invoices to update or balance out the supplier account then the creditors balance would increase and that's what I'm confused about.
You said in your original post that the balance on this supplier was negative - this is because you have entered more payments than you had invoices for. When you enter these missing invoices, it will either
- bring the account to NIL
- create the correct credit balance - the supplier activity statement, that we have told you to request, should help you determine whether you should have NIL, or whether there were actually some invoices that hadn't been paid at the year end.
If you dont have NIL or the correct balance, then there may be something else missing... dont forget, if you have added new transactions for this current year, you will have to run retrospective reports to check the balance at the year end.. this involved ticking "exclude later payments" on the aged creditors report.
-- Edited by FoxAccountancyServices on Tuesday 24th of March 2015 12:52:58 PM
