Hi All,
Entering my journal entries, I have to select - on the bottom of the sheet - if these entries are for purchase or sales. For VAT purposes.
Is there a way you can make this a standard - somewhere in the settings?
All my journal entries are ‘purchase’, but the form is standard ‘sales’, which I always have to change.
This is extra work and I might forget it.
Maybe it could be changed in the ‘settings’ ‘forms’ for journal entries? There is no choice right now.
I am curious as to why are you entering “purchases” as journal entries?
Joe,
When receiving an invoice I do make a journal entry of it in the correct cost account.
When VAT is involved you have to make a choise down on the sheet if this is purchase or sales involved.
Otherwise your VAT will be incorrectly registered.
By receiving an invoice do you mean a supplier sends you an invoice. If so why not just enter a “Purchase invoice” in Manager complete with tax code. Or
By receiving an invoice do you mean you have paid a supplier for an invoice entered into Manager. In which case why not enter a payment and allocate it to the appropriate “Purchase invoice” in Manager (with tax codes handled by the invoice). Or
By receiving an invoice do you mean a you have paid a supplier for an invoice that you have not entered into Manager. In which case why not just enter a payment in Manager allocating it to the appropriate income/expense account with appropriate tax codes.
I’m not sure which one of these is better done with a journal entry.
@Henny, combined with your other thread, where you asked related questions, this topic strongly suggests you are not using Manager correctly. Journal entries should be rare in Manager. Purchases are recorded either through payment or purchase invoices, not journal entries.
@Tut, Thanks for your quick answer.
Purchase Invoices are per invoice. This is not efficient. So I am not using it this way. Never had any complaints with journal entries as here you can create 20-40 lines and post once a month all incoming invoices. Very efficient. All years before 2021 the VAT was automatically filled. Strange it disappeared.
Officially you are correct, but is there one auditor which would not approve the way I work?
If Manager configuration would be bulk purchase invoicing then it is a good moment to use this.
@Patch,
I am receiving invoices and collects them for 1 month. Most of the invoices are not paid yet and are posted to a suspense account (I have 30 days credit).
When the bank payments are ready for that particular month I enter them in bank payments. Most of the posting are to the supense account.
I do a reconciliation between payments and purchases and checks if I missed some payment or I have a payment, but not the invoice.
I do not post per day which is inefficient. I do the bulk in once a month.
And no, using purchase invoices is a time consuming work, which can be altered by Manager in future.
This is not a reason to use journal entries for recording purchases. You can do exactly the same thing with a purchase invoice: enter 40 lines from multiple sales invoices you have received from the supplier during a month.
That is not the point. From the standpoint of accounting fundamentals, every transaction is some form of journal entry. The point is that the Manager program is designed to be used in certain ways. It minimizes the use of journal entries because so many users struggle with identifying which accounts to debit and credit.
Anything posted to Suspense in Manager represents a mistake awaiting your correction.
There is nothing wrong with monthly entries. Nor is there anything about them that makes recording purchases with journal entries desirable.
That will not be altered. Using purchase invoices is more convenient than trying to use journal entries. You have, yourself, described why this is so. Or, since you are already waiting until the end of the month to make entries, you could make things still easier by skipping the purchase invoice step and simply entering the payments directly.
Why is that? For example Prepaid Expenses → Insurance in Balance Sheet uses monthly Journal entries to put 1/12th of the amount as an Expense in P&L, this is supposed to be good accrual accounting practice.
Because, as I already wrote:
Also, by providing dedicated forms for different transaction types, the program allows design and presentation of transaction form content appropriate to usage and allows customization of completed forms by transaction type. This also facilitates development of reports.
Your example of prepaid insurance is one of the reasons journal entries are available at all. And yes, that is good accounting practice. But similar transactions are normally few compared to the volume of sales quotes, sales orders, purchase orders and quotes (which you cannot do at all with journal entries); invoices (which would be awkward to send to customers in the form of journal entries); receipts and payments (what customer or supplier would recognize a journal entry for these purposes?), and so forth.
Technically, there is no accounting transaction that cannot be reduced to an equivalent journal entry. But people look for more from their accounting program.