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Trade creditors don't reconcile, have check and found multiple journals dating over the past year where there is no gst or GL code recorded

Francis13
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Francis13

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Trade creditors don't reconcile, have check and found multiple journals dating over the past year where there is no gst or GL code recorded

Trade creditors don't reconcile, have check and found multiple journals dating over the past year where there is no gst or GL code recorded - the journal only states Bank Account and Trade Creditors

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Ultimate Partner Mike_James
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Re: Trade creditors don't reconcile, have check and found multiple journals dating over the past year where there is no gst or GL code recorded

Hi @Francis13 , those journals probably represent bill payment transactions, typically Dr Creditors and Cr Bank. The out of balance probably has other causes. 


Regards, Mike (mike@datawise.co.nz)
DataWise Limited (www.datawise.co.nz), developers of:
DataWise Report Writer - Custom Reporting from MYOB programs
(Including AccountRight Classic/Live, and exo Payroll)
New: S.T.P. Reporting solution for (Aust) v19 users, email for details

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Ultimate Partner Mike_James
4,250 Posts
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New Zealand
Mike_James
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534Solutions

Re: Trade creditors don't reconcile, have check and found multiple journals dating over the past year where there is no gst or GL code recorded

Hi @Francis13 , this help topic Reconciling Receivables & Payables may be of assistance. 

 

If your file is set up correctly, then normal supplier purchases and bill payments transactions should not cause imbalances. You should review the linked purchase accounts (via the Set-up menu) and make sure that they are correct, particularly the liability account, the default bank account, and (if you use Receive items) the inventory accrual account, which should NOT be the same as the liability account*, and supplier deposits (same comment). The Help topic What are linked accounts? has more details.

 

A journal from a normal purchase transaction will debit assets (eg inventory) and/or expenses, and GST,  and will credit the Payables account. (A negative purchase will do the reverse). A bill payment will debit the Payables account and credit a bank account. 

 

In addition, using the Payables Reconciliation report:

- is there a prior date when it balanced (the best outcome!)? If so,  run the report for each month-end since. If you find a difference, use the report to find the day/s in that month when the difference arose, then using the Find Transaction screen for the Payables Account, review the transactions - one or more may be the cause. 

- at a future date, is the imbalance the same, or different, or nil? If nil, that suggests a timing difference, eg a payment in the current month for a purchase in a future month; an explanation can be written on the printed report. If the same, then probably only one transaction is the cause, such as a year-end general journal adjustment.

 

You can also use the Find Transaction screen to search the Payables account for transactions which should not be there. With a wide date range, use the Advanced search window, and filter for each of these journal types in turn - sales, receipts, inventory and general journals. (Only purchases and disbursements should be in this account). If you turn up any others, find out why they are there - eg year-end general journal adjustments, incorrect item set-up, incorrect coding of service sales. 

 

Classic examples of transactions causing imbalances include service purchases coded to the payables account.

 

If a prior end-of-year transaction has been posted direct to the Payables account, possibly at the direction of external accountants, this may be reversed in the current year, and if necessary a separate (adjacent) account can be created for similar adjustments in future. Keep them informed.

 

Always consider the materiality of the difference - if it is small and unchanging, then a general journal to transfer that difference to the P&L (purchases?) would be quite acceptable.

 

* If the payables account has been used as the inventory accrual account I can explain further what you can do to correct it. 


Regards, Mike (mike@datawise.co.nz)
DataWise Limited (www.datawise.co.nz), developers of:
DataWise Report Writer - Custom Reporting from MYOB programs
(Including AccountRight Classic/Live, and exo Payroll)
New: S.T.P. Reporting solution for (Aust) v19 users, email for details

Francis13
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Francis13

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Re: Trade creditors don't reconcile, have check and found multiple journals dating over the past year where there is no gst or GL code recorded

Thanks for that I will check this out at the weekend and see if I can see narrow it down, but it does seem rather random as it is does not appear to be the same customers affected all the time. Will reply again in a few days. Cheers

Francis13
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Francis13

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Re: Trade creditors don't reconcile, have check and found multiple journals dating over the past year where there is no gst or GL code recorded

Good Morning,

Sorry for the late reply I only work for this company one day a week so my time is limited.

I worked several hours on this over the weekend and while I can narrow  down the out of balance to 5 days of the year I can not find the problem. EG in one example I am out of balance by $5000.00 ish and on that day there was only a couple of small transactions not amounting to more than $700.00 in total. All the out of balance except one are for between $3,000.00 and 6,000.00. The Company Audit Transaction Review  suggests year end journals dating back to 2007 and others inbetween but this does not make sense as all balances are out in the last financial year and in 5 different months. I have check that spend money was not used in error, all good. Because they are large amounts of money I would have thought they would stand out more easily.  Any ideas are welcome. Kind regards

 

 

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