clear old Accounts payable

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  • Updated 8 months ago
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I would like to clear old over payments from years ago which are showing up on the A/P ageing summary. Is there a way of getting rid of them or to just stop them showing on the ageing summary?
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jamie

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Posted 8 months ago

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Kevin Russell, Accredited Partner

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Yes there is.
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Pam

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Hello Kevin
Perhaps Jamie would need to know how to do this?

If you are able to, can you advise how I can correct a journal I put through to creditors that was only to clear an outstanding amount not a Bill, it came about due to exchange rate and wasn't picked up for a while, so I did a journal and I had to put a suppliers name to it.  Now its sitting as a credit against that supplier.  Any thoughts of how to fix please?
Thanks
Pam
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Kevin Russell, Accredited Partner

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If you have created a credit for the supplier then you still need to apply it to the open amount. Have you tried to do this? 

Hi Jamie & Pam

There are a few options depending on your particular circumstances ....

  • Firstly, have these old amounts been reported as expenditure in prior ATO/government reporting (eg BASs, Tax Returns etc)? 

& (if you're GST-registered) .... 

  • Do any include a GST component
  • Are you reporting on a Cash or Accual basis (If you're unsure, check your BASs to confirm)

If so you will need to ensure you have an in/out trail in your transactions reflecting this upon "removal".

If you report on a Cash basis & have minimal overpayment transaction amounts (eg for ones under $10), I'd suggest just editing the original bill to match & re-ticking to re-allocate the overpayment.  However, if you report on an Accruals basis - depending on what was lodged at the time - you may need to create a General Journal entry to reverse these.  If you're not GST-registered & simply to remove these credits from your A/P ....

  • Using the last date of current month/quarter/year as applicable, enter a GJ (crediting Accounts Payable) & select the applicable Supplier in the "Name" column.  (The debit side can be posted to either Opening Balance Equity or a Suspense account if you would prefer to be able to pinpoint these for checking down the track)

If you ARE GST-registered & have previously reported these credits, you can offset this by debiting the same original account & tax code (as per the old, related bill) in your GJ.

  • Once you've created the GJ, go into Pay Bills & you will see you now have a line in the list there for the applicable Supplier, representing your GJ.   When highlighted/selected, you will also see the credit (overpayment) amount in Total Credits Available.
  • Click on "Set Credits" to allocate & edit the Payment Date to match you GJ date, then click on "Pay Selected Bills" to process.

Pam, if you're using RA Premier or above, you may want to turn on multi-currency as RA enters the value difference automatically, posting it to an "Exchange Gain/Loss" expense account.  Alternatively, you could create an additional GJ to move it to this account.

TIP: As you proceed, check the affected accounts to ensure amounts are debiting/crediting correctly & once you've got it right, memorise the GJ transaction(s) so you can easily re-use them if required. 

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Pam

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Thank you Shaz.  I do have multi-currency turned on and use Reckon Hosted.  If I put another journal through to creditors this will leave a nil balance showing on the creditors listing but an amount in the Balance sheet.  What I really need is to do a journal to creditors without putting a suppliers name but Reckon doesn't allow this.  I wonder if I did a bill that coded the amount to exchange rate gain/loss and then allocate the credit to the bill?  I'm going to try that.  However I think the BS creditors account will still be wrong. I'll let you know.   thanks

Hi Pam

".... If I put another journal through to creditors this will leave a nil balance showing on the creditors listing but an amount in the Balance sheet ..." 

Are you referring to the Creditors Balance on the Balance Sheet or another account?

You will need to post individual GJs per Supplier if this amount outstanding relates to more than one.

Basically, you need to create each GJ & allocate according to the Supplier transactions that created the initial O/S balance(s) in your A/P.

Hope that helps.

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jamie

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Hi Shaz,
Thank you for your in depth explanation. Very much appreciated!
Its great to finally get the amounts off the ageing summary.
Thanks again