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MYOB procedure for reconciling Accounts Payable (Creditors)
- You should reconcile your accounts payables after you have entered all the supplier invoices and suppliers payments for the year. It is also a good idea to reconcile monthly.
- From the Reports menu, choose Index to Reports
- Select the Purchases tab to display the purchases reports.
- Under the Payables heading, select the Reconciliation Summary report so that it is highlighted.
- Click the Display button. The Report Customisation window appears.
- In the Payables As Of field, type 30/06/07, click Display
- If there is a difference between the Control Account in Current Liabilities and the total Accounts Payable balance as per the supplier accounts, an "out of balance" amount will be displayed.
- Fix the "out of balance" amount
- Find out when the transactions occurred.
- Change the date in the top left corner of the Reconciliation Report and click Redisplay
- Highlight the date on the report and + Tab (adds one day) or - Tab (deducts one day)
- Work forward or backward from the date to when the Out of Balance amount was "0"
- Find the incorrect transaction.
- From the Command Panel click on Find Transaction
- Type the account number and tab to select the Accounts Payable account
- Click the zoom arrow to view the details of the transactions.
- From the Edit menu select Reverse purchase
- Click on Record Reversal
- Go to the Purchases command centre and select Enter Purchases
Reconciling MYOB Creditors Ledger with Creditors Statements
- In the Purchases Command Centre click on Reports and select Supplier Ledger Report under the Supplier heading. (This report is only available in the latest versions of MYOB).
- Click the Customise tab. Click on the Down arrow and select the Supplier to be reconciled. Under the Advanced Fields Tab enter the dates of the period to be reconciled. e.g. Dated from 1/09/07 to 30/09/07. Note: The dates of the Supplier's Statement and the Supplier Ledger Report should cover the same period. For consistency, work from the last reconciliation date.
- Under the Report Field tab select either Transaction Amount or Debit, Credit. I personnally prefer using the Debit, Credit fields.
- Check the balance of the report with the balance on the Supplier's statement. If the totals are the same, the account is reconciled.
- Depending on how many people are accessing Purchases and whether invoices are being posted to prior months after you have reconciled, it may be a good idea to print out the Supplier Ledger report and attach it to the Supplier's statement.
- Write on the Supplier Statement : Balance as per Ledger.
- The Creditors (suppliers) reconciliation should be filed in month order with the Supplier's statement and invoices paid for the month attached.
- If the balance of the Supplier's Statement for the month differs from the balance on the Supplier Ledger Report, go to the previous month's reconciliation and work forward.
- Check that the Opening Balance per the Supplier Ledger Report agrees with the Closing balance per last month's reconciliation. If it doesn't, entries have been made to the prior month .
- Working from the previous reconciliation, the Supplier's Statement and the Supplier Ledger Report, check off discrepancies on the previous month's reconciliation that have since been corrected e.g. payments not yet recorded by the supplier, invoices paid twice, credit notes not yet recorded, invoices not yet received etc.
- Check off the entries on the current statement and ledger report.
- Unticked entries on the Supplier's Statement or/and the Supplier Ledger Report will be the differences.
Note: In a perfect world, the Supplier's Statement should resemble the Supplier Ledger Report (with an Opening Balance which equal's the previous month's Closing Balance).
Problem with dates:
A problem with MYOB and other software is that the date entered for the Purchase Invoice is crucial. This date determines whether the invoice will be posted to a current month or prior. Suppose that someone has mislaid a supplier invoice or held on to it for months (there could be a problem e.g. damaged goods or the Owner of the business may have a cashflow problem). Then it is finally posted to a date 6 months prior. This posting effects the BAS which has already been calculated and paid, the Profit and Loss for the previous month, the Creditors etc.
This problem is most likely to occur if a Supplier's/Creditor's Reconciliation is not carried out each month.
The correct way to deal with a problem invoice is to post it to the ledger (enter it in Purchases) with a memo stating that a credit note is required or describing the problem with the goods. The supplier should be notified of this problem and the invoice should be held apart until the problem is resolved.
To Prevent entries to previous months select Lock Periods on the Security Tab in Preferences. Click on the down arrow and select the month before the current month.
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