Entering A/P Balance

I started using Manager for an existing business from August 01, 2016.

When creating a supplier, I need to enter the balance due on August 01, 2016.
So, I created a purchase invoice for the balance due. Is it the right process?

Generally, a purchase invoice relates two accounts-

1) Accounts Payable (Cr.)
2) Inventory or other assets account (Dr.)

But, for the invoice I created above, which account should be debited.

Because I don’t know whether the goods/inventory/assets purchased before are still on hand/consumed/sold or not.

Looking for suggestion.

At the bottom of the New Supplier dialog is an checkbox option saying Starting balance as at 1/8/2016
(Assuming you have already set the starting date in Settings).

When you check that box, you can enter the balance due or credit. You do not need to create a purchase invoice for this total.

No option for entering balance due by checking that box.

Creating a purchase invoice works fine to enter balance due.
But which account should i debit?

Just enter the invoice using the date and account previously used, as it is prior to your start date only the starting balance will reflect. The following id the guide for Customers but the same process applies to Suppliers

Hello Brucanna,

Thanks for your suggestion.
Before August 01, 2016 we always paid our suppliers partially. So, on August 01, 2016 I created a purchase invoice for opening balance.

The problem is, in that invoice, which account should I debit?

I have an IDEA?

We never practiced accounting before in our business. So, for the first time, some problem arises regarding “Opening Balance”. For example-

1) to enter Supplier’s opening balance - which account should be debited?
2) to enter Inventory’s opening balance - which account should be credited?

Assuming that we don’t have any previous records of transactions. We only have balances.
So, I created a current assets account named “Unrecognized Assets” & made the following entry.

To enter supplier’s balance -
Unrecognized Assets (Dr.)
Accounts Payable/Supplier (Cr.)

To enter inventory balance -
Inventory (Dr.)
Unrecognized Assets (Cr.)

Is there anything wrong with this practice? If wrong, what should I do?

If your Supplier invoice was for inventory, use date before start date and use inventory account - don’t use your created asset account. Only the Accounts Payable balance will show on the summary not the inventory value - You can check summary page for results

For inventory opening balances - read the following

The problem is, if I debit inventory account when creating invoice, it means I have that inventory in hand. But I don’t.

The actual inventory on hand is also messed up because I don’t know which inventory from which suppliers. But I know the amount and value of inventory on hand.

Another thing is, we don’t sell inventory. We use it to provide service (broadband internet). There are so many types and categories. So, I use different software for inventory management.

In manager, I don’t use in-built inventory system. I created assets group & account for inventory.

And to allocate the cost to different service & location, I created the following accounts-

I hope you would understand the scenario here.

No it doesn’t - as I stated previously - if the invoice has a date prior to the starting date then only the Accounts Payable balance will show not the inventory balance. In the following screen shots the invoice is dated Jul 20 but the summary show zero inventory plus 500 AP

Even if you had used your self created asset account the balance would have been zero and the AP would have a balance - why don’t you try it.

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In my opinion, it would be against the accounting principles if AP has a balance and inventory doesn’t.
In my self-created assets account, both accounts have a balance.

You are missing the point completely - you are taking up starting Balances in accordance with Manager’s software requirements and you are not doing accounting principle entries. Accounting principle entries only occur from your Start Date onwards.

And in the future what does that account balance represent - absolutely nothing. Its a lame duck account and how does that fit in your accounting principles of having meaningless account balances.

In Closing: Tens of thousands of Manager Users have installed their Starting Balances in accordance with the Guides and are operating very successfully - surely they can’t all be wrong.

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