How to record credit purchase and then pay the creditor

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  • Updated 6 years ago
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Hi,

I'm not sure how to record a credit purchase in Reckon One.

There are two transactions I need to do:

  1. record the credit purchase from a creditor
  2. at a later time, pay off the creditor using a bank account

Any help would be appreciated. Thank you.

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Kevin Xu

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Posted 6 years ago

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Tim Spillman

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Create a liability account for the purchase, depending how the expense is claimed depends how you set it up.

Direct Claim for the amount: expense account >> liability account then to pay off write cheque << liability account.

Credit purchase is a type of loan.
(Edited)
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Kevin V. Russell, Accredited Partner

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You need to enter a bill for the purchase. Very simple. And when you pay it just use bill payment. It's not complicated at all
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Kevin Xu

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Hi, I know how it works in theory, however I don't know the buttons to press in Reckon One to make it happen. Is that just two journal entries or do I use Make a Payment under Transactions?
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Qwerty

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Hi Kevin,


What modules have you purchased in your Reckon One book?


The invoicing module allows you to enter customer invoices and supplier bills via the transaction menu in the application.


Customer invoice scenario:

1. Enter the customer invoice

2. Once the customer has paid, you enter a receipt transaction from this customer to close off the invoice


Note: Open invoice amounts are tracked in the system default account "Accounts Receivable"


Supplier bill scenario:

1. Enter the supplier bill

2. Once you have paid the supplier, you enter a payment transaction to this supplier to close off the bill


Note: Open bill amounts are tracked in the system default account "Accounts Payable"


If you currently haven't purchased the invoice module in your book and you want to check it out first to see how it works, you can play around with the demo book.


If you want to purchase the invoicing module, in the book selection screen select the "More" option on your book.
(Edited)
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Qwerty

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The invoicing module also allows you to enter customer adjustment notes (e.g. customer credits/refunds) & supplier adjustment notes (e.g. supplier credits/refunds) via the transactions menu in the application.
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Kevin Xu

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I don't have the invoice module. In that case, would it be just two general journal entries?
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Qwerty

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Yes you could use journals to record these transactions, however, if you will be regularly...
* entering bills & making bill payments at a later time
* entering invoices & receiving invoice payments at a later time

then it may become difficult to record, monitor & track using only journal entries compared to having the invoicing module & using the bill & invoice features. Having the invoicing module makes it very easy to record this info, it's streamlined, easy to report on & track etc (Note: The 'Lite' invoicing module is $3 per month).

I'll explain how it works when using the bill feature of the invoicing module & what the equivalent journal entry would be.

When entering a supplier bill, the balance of "Accounts Payable" (Liability) increases by the expense(s) used in the bill.
So if this was a journal transaction: debit the expense account(s) & credit "Accounts Payable".

When paying a supplier bill, the balance of "Accounts Payable" (Liability) reduces by the bill payment amount & the applicable bank account also reduces by the bill payment amount (e.g. offset liability with payment). 
So if this was a journal transaction: debit "Accounts Payable" & credit the bank account.
 
(Edited)