Establish Starting Balances
This Help File Page was last Modified on 04/01/2012
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Establish Starting Balances This Help File Page was last Modified on 04/01/2012 |
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Establish Starting Balances This Help File Page was last Modified on 04/01/2012 |
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| □ | Once you have entered Vendor Classification codes, your Vendors, the Purchase Categories you plan to use, and any Recurring Purchases you want to set-up, it's time to establish each Vendor's Starting Balance. |
| □ | Establish Starting Balances: |
| • | Enter each Vendor's outstanding Bills. |
| • | Enter any Credit Memo's that are outstanding. |
| • | Enter any Deposits (which are simply Payments that have not been applied to an Invoice) that you have paid. |
| ► | Note: Some users prefer to enter the Accounts Payable transactions for the month or quarter prior to the current month to have some "history" of each Vendor's previous transactions. |
| □ | The first step in establishing the proper amount due to a Vendor, is to enter their Outstanding Balances. |
| □ | Although you can simply enter a single Bill for the total balance currently owed to each Vendor, don't. |
| • | You may want to pay some, but not all of that Bill. |
| • | You may have a dispute arise with one of the outstanding Invoices making up the "Total Balance Due" Bill you created. |
| • | You may want to return something for a Credit to be used later, and properly track the type of expense that was credited. |
| • | There are other reasons, but they all relate to not having the DETAIL of the related transactions when they're needed. |
| □ | Let's get started: |
| • | It's probably better to complete this process for one Vendor at a time. |
| • | The links below will direct you to the detailed information you'll need to complete each of the steps. |
| • | Gather the paperwork which substantiates what is owed to the Vendor including Invoices, Statements with Interest charges, and any Credit Memos and Deposits that have not yet been applied to an Invoice. |
| • | Calculate the gross amount due on all un-paid and/or partially paid Invoices, being sure to include Deposits and Credit Memos that have not yet been taken against open invoices. |
| • | Enter Purchases, creating a matching Bill - including the detail of what was Purchased, Shipping fees, and the Sales Tax owed - for each Vendor's outstanding Invoices. |
| • | Note: If there are Credit Memos or Deposits outstanding, these will have to be entered, as well. |
| • | When you're finished entering all the transactions for a Vendor, compare the Vendor's Balance Due field (on the Vendor Information Form) with the calculated total gross amount due. |
| • | If the Balance is not correct, print a Vendor Ledger Card, compare it to the paperwork you assembled and add to, delete, or correct the transactions as needed. |