DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Customer statement (transaction)


#1

this is to just ask, printing a customer transaction detailed report, i noticed that the debit total, and credit total didnt make a right computation…like here on the pic i grab from a report i generate, it shows the debit total is 1550 and the credit total is 4650 and it rflects 0…i was thinking, maybe manager didnt include the forwarded balance of 3100…anyone who also noticed the

same?


#2

yup it does not include opening balance. @lubos, I think you need to include it. for accountant perspective there should be balance brought forward and balance carry forward.


#3

The calculation is Opening Balance + Debits - Credits = Closing Balance.
The Opening Balance is not part of the debits/credits movement within the From / To dates.


#4

to me, opening balance should still be a part of debit and credit, as u can see, beside the balance brought forward is a Dr, means, there is a debit balance after a certain cut off date, and it should be accounted to the next period…it may create confusion to the customers actually, since this is a statement of their balance…


#5

No, because the opening balance relates to transactions that AREN"T part of your date criteria.
In your illustration you are asking for transactions between 08/01/2018 and 08/20/2018 to be detailed - the transactions that make up the opening balance AREN"T between those dates and. therefore don’t constitute the debits or credits between those requested criteria dates.

PS: I have never known of a customer to be confused by a statement - closing balance last month ='s opening balance this month plus the transactions for this month ='s closing balance this month.


#6

When it was first introduced, the Transactions-type statement did not include any totals, just debits, credits, and running balance. Then one or two users complained that totals were missing. So they were added, despite the fact that, in the context of a statement, they are not helpful. About the same time, someone complained that there was not a closing balance, even though the last figure in the Balance column is exactly that. So an explicitly labeled Closing balance was added.

Personally, I found both additions could be confusing to customers or were unnecessary. The idea of an opening balance being adjusted upwards and downwards by current debits and credits seemed sufficient by itself. There is, after all, no accounting reason to think that numbers on a statement should balance.


#7

thanks guys for taking time to help me with my concern.


#8

To make everyone satisfied, perhaps Opening balance should show (if applicable) among totals. And shouldn’t show as the first line at all.


#10

the solution would be to show the opening balance below the main table, (with 0.00 if there is no opening balance), just above the total debits and total credits.

opening balance
total debits
total credits
closing balance


#11

If you are considering modifying the format of statements, you should address two bigger issues:

  1. Most recipients do not understand debits and credits. And if they do, they won’t know whose perspective the statement is from, that is, whether debits and credits are from the recipient’s or issuer’s viewpoint.
  2. When transactions are numerous, the totals are just two big numbers annotated with debit/credit designations most do not understand. And their difference is a smaller number with a similar, confusing annotation.

The solution has four aspects:

  • Rename columns with commonplace headings: for customer statements, use Charged and Received; for supplier statements, use Charged and Paid.
  • Bow to natural expectations that time flows from top to bottom. Therefore, the first line should be the Opening balance (normally in the Charged column). Subsequent transactions should flow chronologically in appropriate columns.
  • A running Balance column should list the balance after each transaction. Numbers should be positive or negative from the recipient’s perspective. On a customer statement, new charges should move the balance in a positive direction, receipts in the negative. On a supplier statement, new charges should also move the balance in a positive direction, payments in the negative.
  • Below the main table, in the totals section, display a switchable heading, either Balance due or Amount of Credit and the absolute value of the running balance.

Note, my suggestion eliminates totals for amounts charged, received, or paid, because when analyzing transactions, what matters is either the individual transaction or the net, no intermediate totals of one type of transaction.


#12

Lets not dumb down accounting …
If a person does not understand debits and credits, they have no business being in business.


#13

Statements are not primarily for accountants. They typically are handled by administrative staff who process bills and get by just fine without understanding debits and credits. And I know plenty of successful business people who don’t understand. So they hire accountants. But even those accountants might wonder whose debits or credits.


#14

I thought is common for the statement came from issuer perspective.


#15

I think that the statement in its current format is quite good. I would suggest that the opening balance continue to be displayed on the first line, but with the opening balance amount in the Balance column only (i.e. not also in the debit or credit column). (Most businesses (including banks) display the opening balance amount in the balance column only, on their statements).


#16

agree, but I think lubos’ suggestion would be better presentation as addition to generalegend.


#17

Manager follows the opposite approach, presenting statements from the customer’s or supplier’s perspective. As explained in the two Guides on customer and supplier statements, this means both debits and credits are reversed from your (the issuer’s) perspective. This is an example of why labeling things as debits and credits can be confusing.


#18

I see… I forgotten we did ask lubos about reverse sign on capital accounts. Then as @Tut explained. the jargon used had to change. I think we did discussed about different audience with different reports. We can have for internal used and external. @lubos I think the design need to revisit. whether is best to have all in one or otherwise.

I did learn one thing here, usually we had to design templates for the same data but different presentation for different audience. between government, investor and operation.

Some are for costing like project based. Still curious does lubos had in mind to cater all of this phase by phase?

if he does manager can be more than ERP…


#19

I think that’s good way to do it. One might argue about statement repeating itself since opening balance already shows as the first line item but then again - closing balance already shows too.

Therefore the latest version (18.8.19) will show Opening balance figure (if not zero) among totals.

For this reason, there are two types of statements. Unpaid invoices style is easier to digest for non-accountants, it doesn’t contain any technical terminology. Transactions style is more difficult to digest but I see nothing wrong with Debit, Credit headings. Many banks show on bank statements debit/credit headings so it shouldn’t be totally foreign concept even for non-accountants.

I like this idea. This would make Total debits and Total credits totals more obvious what they are actually adding up. The latest version (18.8.19) shows opening balance in Balance column only.

Statements (at least Transactions style) are always from your perspective, even in Manager. Consider customer statement in the screenshot at the top of this post. Customer statements shows debits/credits to accounts receivable. Invoice debits accounts receivable and therefore invoice shows under Debit column. Payments received credit accounts receivable and therefore payments received show under Credit column.


#20

wow! thanks @lubos and @tuts, this modification is truly great and very helpful.


#21

This explanation shows how confusing debits and credits can be. It would be more accurate to say debits and credits in statements are currently determined according to their impact on Accounts receivable (for customer statements) or Accounts payable (for supplier statements). Personally, I have always interpreted them relative to their impact on the bank or cash account, which means they are reporting according to the recipient’s perspective.

As you say, on a customer statement, a sales invoice is shown as a debit, resulting in a receipt needing to be shown as a credit in order to offset it. The fact is, transactions-type statements show only one leg of each transaction. Yes, a sales invoice debits Accounts receivable, but it also credits an income account. And a receipt credits Accounts receivable, but also debits a bank or cash account. Without making clear which leg of each transaction you are referring to, describing a transaction as either a debit or credit is only telling half the story. That is why I recommended changing terminology to Charged, Received, and Paid.