Notes for Purchase Ledger Usersseptember 2000

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Notes for Purchase Ledger UsersSeptember 2000

Q: I have entered an invoice and run a remittance but I now need to cancel the cheque. How do I do this?

Whenever it is necessary to cancel a cheque you should always do it in the same way as you produced the original cheque. So, if you produced the cheque through the Cash Book you should cancel it through the Cash Book. But if you produced the cheque through the Purchase Ledger Remittances you should cancel it through the Purchase Ledger, NOT through the Cash Book. If you were to enter it through the Cash Book, when you next looked at the supplier in the Purchase Ledger you would have no way of knowing that the cheque was cancelled.

To cancel a PL cheque select ‘Manual Payments’ in the Purchase Ledger and enter a negative payment with the same cheque number and amount (simply put a minus sign before the amount to make it negative). You will then need to enter a credit note to cancel the original invoice and allocate this to the negative payment. The account will then show the invoice and credit note, payment and cancellation, all coming down to zero. If necessary you can then enter the original invoice again, or the invoice and a credit note, or a new invoice for a different amount. Make sure you put comments on your entries for future reference.

There are various different reasons for cancelling a remittance:-

This invoice is not to be paid at all

You entered the invoice and produced the remittance but you were then informed that the goods were to be returned and no payment made. In this case you will simply need to enter the negative payment and a credit note allocated to it. Remember to enter comments against these entries to remind you of what happened in future.

The payment has already been made

The cheque is returned because the payment has already been made. This might happen because the invoice has accidentally been entered twice, or because a payment has been made manually, either through the cash book or through the Purchase Ledger and not been allocated the invoice. If a cheque has been entered through the Cash Book enter the negative payment and a credit note and allocate them. If the payment has been made through the Purchase Ledger but not allocated simply enter the negative payment and allocate this to the manual payment. Don’t forget to enter comments about what has happened.

A different amount should have been paid

You may have received a credit note which should have been included in the remittance. Cancel the remittance by entering a negative payment and a credit note to clear the original invoice and allocate them to each other. Then re-enter the original invoice and the credit note, and you can then produce a new payment – either a remittance or a manual cheque.

The payment should not have been made now

You may decide that you do not wish to make the payment in this period. Cancel the cheque by entering a negative payment and enter the credit note to clear the original invoice and allocate them together. Then re-enter the original invoice and run the remittance when you are ready.

Q: I accidentally put an invoice on the wrong supplier’s account. How do I correct this?

If you discover that you have entered an invoice on the wrong supplier before you pay it you need simply enter a credit note against the wrong supplier, then using the allocations program allocate the invoice to the credit note. Make sure you put a comment on the credit note entry so you know what has happened. Then enter the invoice against the correct supplier. If, when you go into the allocations the invoice is not available it may be that you have already selected it for remittance even though it has not been paid. You would then need to go into the remittance selection program and deselect that invoice so that you can allocate it to the credit note.

If you discover you have entered an invoice on the wrong supplier after the payment has been done you will need to cancel the cheque (see above). You will need to enter a credit note for the amount of the invoice and allocate this to the negative payment. Make sure you put comments in your entries. You will then need to enter the invoice against the correct supplier.

Q: When I ran the remittances and updated them I put in the wrong starting cheque number so all my Purchase Ledger and Cash book now show incorrect cheque numbers. How can I do my bank reconciliation?

It is a simple job to amend all the cheque numbers within a particular remittance run. Within the Payments Icon you will find an option to Reprint Remittances. When you take this option the last batch number will be displayed. If this is the correct batch tab through the number and the remittances will be displayed on the left. Use the ‘Select all’ button to select them all. To amend all the cheque numbers tick the ‘new cheque numbers’ box and enter the correct first cheque number. When you press the button to ‘print copies’ the cheque numbers will be amended. You could either print the copies on plain paper, or if you do not want the copies you may print them to a file. To do this, when you have selected ‘print copies’ check the print setup screen. Click on the ‘Specific printer’ displayed and a list of other available printers will be shown. One of these should be ‘Generic/Text only on FILE’. Select this one and you will then be asked for a file name. Type in something like remits.prn. The cheque numbers will be updated but nothing will be printed on the printer. Finally you MUST remember to print the audit trail for the remittance run again. This will show the remittances with the amended cheque numbers.

Q: What should I do if the printer jams when the remittances are being printed?

Occasionally, when printing remittances the printer might jam. At this point NEVER click the ‘cancel’ button on the screen. While the cancel button is displayed the program is doing the processing and making all the appropriate entries in both the Purchase Ledger, Cash Book and the Nominal Ledger. If you do cancel at this point you will find that some things have been updated and others not, leading to an imbalance between the Nominal and Purchase Ledger.

What you should do is turn the printer off until the computer thinks that all the remittances have been printed, then re-print the ones which were lost. Depending on the type of printer you are using you may need to stop the printing in the print manager to do this.

To reprint your remittances go into the ‘Reprint Remittances’ option within the Payments icon. The last batch number will be displayed. Tab through this and all the remittances will be shown. Select just the ones you wish to re-print and use the ‘Add to selections’. Put new remittances in the printer and, if necessary, do a test print. Then enter the first cheque number of the new remittances and tick the ‘amend cheque numbers’ box. Once you have printed the remittances make sure you print the Audit trail using the Remittance Audit trail option. This will show you all the remittances in the batch, showing the correct cheque numbers for the remittances before and after the printer jammed.

Q: Why do I need to print the Remittance Audit Trail? If it is so necessary why doesn’t it print automatically?

Whenever you make entries into any part of the OASIS system you should always check that everything has gone in as you expected and no errors were encountered. Occasionally problems can arise and it is much easier to sort these out if you spot them immediately, rather than wait to the end of the year when lots of other things have happened since. Every time you enter a batch of invoices you should check that the postings to the Nominal Ledger have gone through correctly by checking the Audit Trail. With the remittances it is just as important to check the Audit Trail. This does not print automatically. The reason for this is that many users use pre-printed remittance stationery and this needs to be removed before you can print the Audit Trail.

When you check the Audit Trail check that no errors are reported at the end. Also check that the PL Control Transaction, Bank control transaction and the Bank transaction are shown correctly at the top of the report. Once you have checked the audit trails you should file them in case you need to check them again later, or in case the auditors wish to see them at the end of the year.

Q: Why should I check that the Purchase Ledger Control Account in the Nominal Ledger agrees with my Purchase Ledger balance?

Every entry you make in the Purchase Ledger – invoices, approvals, remittances, payments, credit notes – makes two entries in the Nominal Ledger. One will always affect the Purchase Ledger Control Account. This control account should always have the same balance as the Purchase Ledger itself – increasing when invoices are entered and decreasing when payments are done. It is, in effect, a summary of the Purchase Ledger itself. You should be checking regularly that this Nominal Figure does in fact agree with the Purchase Ledger balance. If it does not agree then it is possible that other parts of your Nominal Ledger are also incorrect – since if a control posting did not happen, it may be that the posting to the expense account or the bank also did not happen. If you check this regularly you will spot any problems and know within which period they occurred. If you wait for some months you will have to check through far more data to find the error.

Q: How do I check that the Purchase Ledger Control Account in the Nominal Ledger does agree with my Purchase Ledger balance?

To check the PL Control account you will need to print two reports:-

1. In the Purchase Ledger print an Age Analysis Report. Check the ‘Advance Payments’ box and the ‘Exclude Unapproved’ box. The figure you are interested in is the Total figure in the Total column.

2. In the Nominal Ledger print a Transaction report using the default dates for the Purchase Ledger control account. (Don’t put in today’s date as there may be entries in the Purchase Ledger in advance.)

Now compare the two figures. If they are not the same you will need to find out why. (see below). If they are the same file these reports. Then if the next time you do this check there is an error you know it can only have occurred after this time. Remember though, that although you may have checked everything up to the end of, for example, June, if an error does subsequently occur it is possible that the error could still be within this period, as you might, for example, be posting old invoices. These, although they might be dated June, would have a higher transaction number.

Q: If the Nominal Control doesn’t agree with the Purchase Ledger how could this have happened?

There are number of reasons why the Nominal Control account might not agree with the Purchase Ledger balance. The three most common are:-

1. There was a posting error when a batch was closed and the Nominal Ledger entry was not made correctly. This should have been spotted at the time by checking the audit trail, but may have been missed.

2. Entries have been made directly into the PL control account in the Nominal Ledger. Since this is a control account and is always updated automatically whenever you make entries in the Purchase Ledger you should never need to enter any journals or other direct entries to this account. Occasionally users do journals to this account, or accidentally code an invoice to this account. These entries should be easy to spot when checking the Nominal Transaction report. You will then need to decide where these entries should have been and transfer them with a Nominal Ledger Journal, making sure that you add comments to show what has happened.

3. There has been a misallocation within the Purchase Ledger. Whenever an invoice is paid it is allocated wholly or partly, against the payment or a credit note. This leaves an unallocated balance (usually zero). Occasionally the unallocated balance is incorrect, because of an error which occurred during the allocation. This will cause an imbalance between the Purchase Ledger balance and the Nominal Control account.

Q: If the Nominal Control doesn’t agree with the Purchase Ledger what do I do?

To check the imbalance the first thing you should do is to check the Nominal Ledger report to see if there are any journal entries in the control account. Check also that there are no entries from the Cash Book, Payroll or Fees, and that no Purchase Ledger invoices have been allocated there by mistake. All these entries should be obvious as they will appear different to the usual entries made automatically by the Purchase Ledger itself. Any such entries can usually be corrected by a Nominal Ledger journal. Make sure you enter a comment on the journal.

If this does not solve the problem Print a Ledger report from the Purchase Ledger. Check the ‘include zero balances’, ‘summary’ and ‘wide report’ options. Use a pitch of 7. This report has three columns – debits, credits and balance, plus an uncleared balance in brackets. This uncleared balance is the allocated balance and a difference between this and column 3 (balance) would show an error in allocation (see 3 above). If you find this you will then need to look through this report to see which supplier, or suppliers, the difference occurs on. Then you would need to print a detailed ledger report for that supplier (using ‘include zero balances’ and ‘wide report’). You should then see which invoices/payments are incorrect and look at them more closely.

The report will look like this:

1001 Express Stationery

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Total 1331.44 1155.20 176.24 ( uncleared: 176.24 )

1002 Browns Bookshop

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Total 790.15 790.15 0.00

1003 The Sports Centre

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Total 709.50 405.00 304.50 ( uncleared: 304.50 )

1004 Supplies for Schools

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Total 1182.12 1182.12 0.00

Total 4013.21 3532.47 480.74 ( uncleared: 480.74 )

Finally you might need to check the postings to the nominal ledger batch by batch. Initially check that no batch numbers are missing by checking them off in sequence on the report. Make sure that the last batch shown is correct. If any are missing you would need to go back to your filed audit trails to see what happened to that batch.

If you cannot sort out where your imbalance has occurred you should talk to us at Beaver Software. We will probably need to you send a backup of your data so we can see what has happened and advise you how best to sort it out. In the meantime don’t forget to continue checking the PL control. Make a note of how much it is out by now and make sure that it continues to differ by the same amount.

Q: The accountants want to know the balance which was on the PL at the end of last term, but we’re halfway through the next term now and the invoices outstanding then have all been paid. How do I get this figure?

You can always get the creditors balance at any date by using the Age Analysis report with the following options. Use the date you wish to see the balances up to (eg 31st August). Select the date option as ‘Posting Date’. Select ‘Use net of transaction balances’, and ‘include zero balance accounts’ but exclude unapproved invoices. Do not select the ‘advance payments’ option.

By using the ‘net of transaction balances’ the balance is worked out by taking all the invoices, credit notes and payments up to that date and calculating a net figure. Using current balances would take the balance on each entry, and the balance on an invoice which was paid after the selected date would be zero. Hence, if we need to see the balance at a date in the past we can only do it by using the ‘net of transaction balances’.

Having produced this report is should also agree with the PL control account in the Nominal Ledger at the same date.