Account receivable and inventory


I am facing a challange with my inventory. I have transfered the business from another system to Manager and I know that in Manager you have to add all receivable and payable from the previous year by adding old (purchase) invoices, you cannot just enter the amount a client owes you (or you owe the supplier). I have checked the following guide:

The issue I am facing is that I have set all items with a starting balance at 1-1-17 which was based on the physical count. The invoices from the previous year have some of these items too, but the date of the invoices is before 1-1-17, let’s say for example November 1st 2016. What happens is that Manager’s starting balance from 2016 is for example -3 (the quantity of the item that were sold on November 1st 2016). Then comes the starting balance on 1-1-17 which is for example 10. Hence the actual starting balance on 1-1-17 is not 10 but 7.

I don’t want to simply change the starting balance on 1-1-17 by simply adding 3 to the initial quantity so that for example 13-3=10 (my actual starting balance on 1-1-17). In the future I might need to go back to the starting balance on 1-1-17 and these “fake” quantities would be a problem if I need to remember what happened in the past.

Should I instead move the starting date on Manager to a date before the first recevible invoice from last year (for example October 1st 2016) and here increase the initial quantity of the item to the 10+3=13? In this case Manager will take 3 away from the initial 13 and I will start my new year with the actual physical count… 10.

Is there any other suggestion on this topic?


Firstly, you only need to add “unpaid” invoices as at 1-1-17, not “all” invoices as you stated above.

When you add these “unpaid” invoices, (dated prior to 1-1-17) they will only add balances to the receivable and payable accounts - they don’t update any inventory items balances.

For inventory item starting balances, just enter your physical count figures as at 1-1-17.

Thank you for the feedback.

Yes I have only added the unpaid receivables and payables from 2016. Here I wonder if I can simply add a (purchase) invoice from 2016 with the total amount of the invoice without the details of which items and prices were sold/bought. If I do so, the challange that I face is that in the account field of the invoice there is no option like “Account payable/receivable”. I basically have to enter the items sold as per the real hard copy invoice, which can be a it time-consuming.

Any suggestion?

You can reduce the “unpaid” invoice to being just one account line, using any account, it doesn’t matter as its not going to be carried forward in any way - but on the one proviso, you must be using Accrual Basis accounting. If you want to use Cash Basis, then all details must be entered.

Thank you for your feedback.

What is then the impact of VAT on these “old” receivables and payables in Manager? Obviously the VAT for these sales/purchases was already calculated/managed/declared in 2016 so following your input… whether I put any VAT or not should not have any impact on VAT account in 2017, correct?

You are correct. Postings to and from the Tax payable account occur when an invoice is created. But invoices prior to the start date are ignored, except for Accounts receivable/payable amounts. However, you do want to make sure the starting balance invoice totals match the full amount due.

As @Brucanna said earlier, this presumes you are using accrual basis accounting. If you are using cash basis accounting, the invoice isn’t pulled in until paid. So in that case, you would need to include the proper tax codes.

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