First Previous - Page 1 of 1 - Next Last

Old Invoice

  • 11 posts
  • # 54879

Hi All,

I need some guidance if possible on the following issue which I have been trying to tackle but just can't seem to fathom out :-

My clients' company made a payment to a supplier for which I had no outstanding invoices. On checking with my clients they advised that the payment in fact related to an old outstanding invoice. I have only recently taken over the books from another bookkeeper and after checking for the invoice in previous years accounts I found that it had in fact been entered correctly into the books in December 2007 and was in fact part paid ( note -the company's year end is 31st March). The bookkeeper from whom I took over was appointed to do the books in Sept 2008 at which time I understand they were in a bit of a mess, from what I can see she entered this part paid invoice under the suspense account when setting the accounts up on Sage. The invoice then appears to have remained outstanding until March 2010 when the previous bookkeeper in effect removed the invoice from the books (along with several other invoices for the same supplier) by entering a dummy purchase credit note on the system thus removing it from the suppliers account and the suspense account. This reduced this particular suppliers account balance to nil so I can only assume that the previous bookkeeper has decided that after investigation this invoice and several others did not need to be shown in the accounts as they had already gone through the books and been paid. However it now appears that the invoice still has a part outstanding balance and I'm not sure how to re-post it into the accounts. As it has already gone through the books and been correctly posted to the purchases nominal code in 2007 I've come to the conclusion it would now need to be posted to the suspense account, but from what I can see this would ultimately mean that the entry would just sit in the suspense account with nowhere I can journal it to in order to clear it out. Has anyone any suggestions as to how I might be able to re-enter this invoice back into the books and have no outstanding balance in the suspense account ( I use sage by the way)?   

Also just to complicate matters the invoice was from a foreign suppier and was in Euros so if I re-enter the invoice into this years accounts would I use the current exchange rate or the one that applied when the invoice was originally entered in the books in 2007?

Apologies for the length of this post but I just wanted to paint the full picture.

Any help would be much appreciated.


Many Thanks


Richard
 

  • 698 posts
  • # 54896

Hi Moonraker.

The way I would deal with this would be as follows.

Get a statement or transction historyfrom the supplier to confirm their outstanding balance.

Post the invoice back on the system however use the payment valution to value the invoice so there is no profit and loss on exchange as this is messy enough as is.

When you get the statement or transaction history from the supplier post an adjusting entry to agree their account using their last dated invoice to get the valuation date and use HMRC exchange rates as of that date.

This in my opinion would be easiest way to correct all the past postings and ensure you have the correct supplier balance.

Best Regards
Stuart

  • 11 posts
  • # 54900

Hi Stuart,

Many thanks for your response.

I have now received a statement from the supplier confirming the outstanding balance, therefore as I now have this and have not yet done anything about posting the invoice on the system my understanding would be that if I now post it using the supplier's outstanding balance from their statement applying the exchange rate applicable as at the date of the suppliers last dated invoice I will arrive at the same conclusion as you have advised below. Have I got ther right end of the stick?

Also just wanted to clarify one other point - I'm not sure which nominal code  I would need to post the invoice to because as it was posted to purchases in the 2007 accounts if I do this again wouldn't this mean the same invoice has been posted to purchases twice albeit in different years?  - 
Probably having a senior moment but any help would be appreciated!

Many thanks for your help.

Kind Regards


Richard 

First Previous - Page 1 of 1 - Next Last
bottomBanner
loading