reverse partially paid purchase from last financial year

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reverse partially paid purchase from last financial year

Hi, we have a purchase for $5,982.97 that was entered last financial year and $550 was paid at that time.  The balance of the purchase was then incorrectly made through spend money. 

If I reverse the purchase in this financial year, I end up with a balance of $550 in returns/debits.

So what can I do to correct this?

Thanks

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Re: reverse partially paid purchase from last financial year

Hi @totalrec 

 

I actually would reverse out the incorrectly recorded Spend Money transaction. You'll want to record that reversal in the current financial year prior to recording the required Pay Bills transaction on the same date as that reversal. The full process is recorded below:

  1. Go to Setup>>Preferences>>Security and enable Transactions Can't be Changed, They Must be Reversed.
  2. Open the Spend Money transaction, select Edit>>Reverse Cheque transaction
  3. Ensure the date of that reversal is entered in the current financial year before selecting Record
  4. Process the necessary Pay Bills transaction with the same date as that reversal transaction

What the above process will do is:

  • reverse out the incorrectly recorded Spend Money transaction (note it will report all allocation amounts in the current financial year)
  • allow the correct payment transaction to be recorded
  • generate a deposit (Spend Money reversal) and a withdrawal (actual Pay Bills transaction) in the bank account. As these amounts should match they can be reconciled in your next reconciliation without impacting your reconciliation - a deposit and a withdrawal of the same amount will cancel each other out.

Note: The above process is something that may want to speak to an Accountant in regards to ensure that it will meet your reporting and business requirements.

Kind regards,
Steven

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Re: reverse partially paid purchase from last financial year

Hi Steven - thanks for the advice, that has worked Smiley Happy 

 

However, there is another issue in that when they recorded the initial purchase they entered an incorrect amount, ie .97 cents instead of .57 cents so I still have 40cents owing on the purchase!  Sorry but I am having a mind blank on what to do with it.  Any suggestions?

 

Thanks

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Re: reverse partially paid purchase from last financial year

Hi @totalrec 

 

Great to hear that process has worked for yourself.

 

With regards to the incorrect cents entered, as the transaction has been recorded in a previous financial year you probably want to discuss that with an accountant about the best course of action. However, what I would be doing is entering a debit note for the outstanding amount (i.e. a negative purchase for that amount) - this transaction would need to be recorded in the current financial year. Once you have recorded that debit note, you would apply that debit note to the original bill using the Purchases>>Purchase Register>>Returns and Debits>>Apply to Purchase.

Kind regards,
Steven

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Re: reverse partially paid purchase from last financial year

Thanks so much for your help.  All sorted now.

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