# Suspense Account Junk **URL:** \ **Category:** Uncategorized\ **Created:** [January 11, 2015, 12:53am UTC](https://forum.manager.io/t/suspense-account-junk/2084 "2015-01-11T00:53:15Z")\ **Posts on this page:** 14\ **Page:** 1
**Author:** ![John](https://avatars.discourse-cdn.com/v4/letter/j/a3d4f5/32.png) [@John](https://forum.manager.io/u/John)\ **Post date:** [January 11, 2015, 12:53am UTC](https://forum.manager.io/t/suspense-account-junk/2084/1 "2015-01-11T00:53:15Z")
Why is all this stuff ending up in suspense? ---
**Author:** ![roth](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/roth/32/735_2.png) [@roth](https://forum.manager.io/u/roth)\ **Post date:** [January 11, 2015, 8:57am UTC](https://forum.manager.io/t/suspense-account-junk/2084/2 "2015-01-11T08:57:31Z")
I am new at this, but the when fund are left in suspense it is because the assets and liabilities are not in balance. The difference is therefore placed in suspense. ---
**Author:** ![lubos](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/lubos/32/62798_2.png) [@lubos](https://forum.manager.io/u/lubos)\ **Post date:** [January 11, 2015, 7:35pm UTC](https://forum.manager.io/t/suspense-account-junk/2084/3 "2015-01-11T19:35:26Z")
There is always a reason why some transactions would be posted to suspense. Here a few: - Incorrect journal entries where debits don’t equal credits (the difference goes to `Suspense`) - Incorrect opening balances where debits don’t equal credits (the difference goes to `Suspense`) - Uncategorized transactions where account is not selected on line item (the line item amount goes to `Suspense`) etc. From accounting point of view, it’s important these amounts go to `Suspense` to make sure your accounting system doesn’t break double-entry accounting principle where `assets - liabilities = equity` even if you do something wrong. ---
**Author:** ![John](https://avatars.discourse-cdn.com/v4/letter/j/a3d4f5/32.png) [@John](https://forum.manager.io/u/John)\ **Post date:** [January 11, 2015, 8:09pm UTC](https://forum.manager.io/t/suspense-account-junk/2084/4 "2015-01-11T20:09:54Z")
Thanks Guys, I am an Idiot! I have worked out what I was doing wrong. ---
**Author:** ![Skyruner](https://avatars.discourse-cdn.com/v4/letter/s/9e8a1a/32.png) [@Skyruner](https://forum.manager.io/u/Skyruner)\ **Post date:** [September 10, 2018, 10:44pm UTC](https://forum.manager.io/t/suspense-account-junk/2084/5 "2018-09-10T22:44:39Z")
Just to make some things clear. I’ve raised a Debit Note from my supplier credit note for $1000 (no stock was returned), and ended up with $-1000 Accounts Payable in Liabilities Section and $1000 Suspense in Equity. Should I just leave it as it is till my next purchase from that supplier? Is it correct? Thanks! ---
**Author:** ![Tut](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/tut/32/3286_2.png) [@Tut](https://forum.manager.io/u/Tut)\ **Post date:** [September 11, 2018, 2:12am UTC](https://forum.manager.io/t/suspense-account-junk/2084/6 "2018-09-11T02:12:37Z")
No, you should not leave it. _Suspense_ is where Manager parks mistakes until you fix them. In this case, you did not choose an account to allocate the debit note to. Read these Guides: [https://www.manager.io/guides/7426](https://www.manager.io/guides/7426) [https://www.manager.io/guides/7106](https://www.manager.io/guides/7106) The two legs of the double-entry accounting for a debit note are: - Debit _Accounts payable_ and the supplier’s subaccount - Credit the expense account to which the original purchase was debited. In Manager, the debit to _Accounts payable_ is accomplished by selecting the `Supplier` from the dropdown list. The credit to the expense account is accomplished by selecting it in the field named `Account` for the line item being adjusted. ---
**Author:** ![Skyruner](https://avatars.discourse-cdn.com/v4/letter/s/9e8a1a/32.png) [@Skyruner](https://forum.manager.io/u/Skyruner)\ **Post date:** [September 11, 2018, 4:26am UTC](https://forum.manager.io/t/suspense-account-junk/2084/7 "2018-09-11T04:26:19Z")
Hi! I’ve tried to allocate it to Accounts Payable, but there is no such option in drop-down menu for accounts (see attached screenshot) ![Screenshot%20Manager](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/1/f/1f08fca84b17217b468d212780272c40f98968b1.png) ---
**Author:** ![Brucanna](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/brucanna/32/1960_2.png) [@Brucanna](https://forum.manager.io/u/Brucanna)\ **Post date:** [September 12, 2018, 8:06am UTC](https://forum.manager.io/t/suspense-account-junk/2084/8 "2018-09-12T08:06:34Z")
To clarify this misleading comment “You should have allocated the debit note to Accounts payable” When you select the Supplier, then that selection allocates it to the Accounts Payable. For the Account, you allocate to the account which was used on the original Purchase Invoice. So if the original Purchase Invoice used “Stationery” account, then the Debit Note should also use “Stationery”. ---
**Author:** ![Tut](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/tut/32/3286_2.png) [@Tut](https://forum.manager.io/u/Tut)\ **Post date:** [September 12, 2018, 1:24pm UTC](https://forum.manager.io/t/suspense-account-junk/2084/9 "2018-09-12T13:24:40Z")
Thank you for pointing out the needed clarification, @Brucanna. @Skyruner, I originally wrote that the transaction should be allocated to _Accounts payable_ and the supplier’s subaccount, but did not mention choosing an expense account. I have edited my post to include both the debit and credit legs of the transaction. ---
**Author:** ![Skyruner](https://avatars.discourse-cdn.com/v4/letter/s/9e8a1a/32.png) [@Skyruner](https://forum.manager.io/u/Skyruner)\ **Post date:** [September 12, 2018, 10:11pm UTC](https://forum.manager.io/t/suspense-account-junk/2084/10 "2018-09-12T22:11:26Z")
Thank you for editing your post. I forgot to mention that in my case I can’t allocate that credit to any expense account, due to the fact that Supplier gave me that credit note for my future spending, so it’s cant be connected with any PO from that supplier or expense. I am not sure if that’s correct, but I’ve created additional account called “Supplier Credits” in equity section and used that account in Debit Note to get rid off money sitting at Suspense. ---
**Author:** ![Tut](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/tut/32/3286_2.png) [@Tut](https://forum.manager.io/u/Tut)\ **Post date:** [September 12, 2018, 11:07pm UTC](https://forum.manager.io/t/suspense-account-junk/2084/11 "2018-09-12T23:07:43Z")
Your approach is almost correct. But your _Supplier Credits_ account would not traditionally be placed in the _Equity_ group, because it does not directly relate to anyone’s investment in the business. (Your books would still balance, though.) _Supplier Credits_ is normally listed as a contra _Liabilities_ account. Thus, it will show with a negative balance, offsetting _Accounts payable_. This may be more than you want to know, but accountants differ on whether _Customer/Supplier credits_ should be rolled into _Accounts receivable/payable_ for simplicity or kept separate for visibility. Manager now does it the first way, although it originally did it the second way. You don’t have much choice, because your transaction involved no money, and you must have an account for the credit leg of the transaction. ---
**Author:** ![Skyruner](https://avatars.discourse-cdn.com/v4/letter/s/9e8a1a/32.png) [@Skyruner](https://forum.manager.io/u/Skyruner)\ **Post date:** [September 13, 2018, 12:06am UTC](https://forum.manager.io/t/suspense-account-junk/2084/12 "2018-09-13T00:06:01Z")
Thank you for a such brilliant answer! Only thing that I found with my approach is that if I create a PO for that supplier with total $1000 + Tax, _Accounts Payable_ changes from -1000 to 0, but _Supplier Credits_ in _Equity_ group still shows 1000… Same thing happens if I keep it as _Suspense_ ---
**Author:** ![Tut](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/tut/32/3286_2.png) [@Tut](https://forum.manager.io/u/Tut)\ **Post date:** [September 13, 2018, 1:08am UTC](https://forum.manager.io/t/suspense-account-junk/2084/13 "2018-09-13T01:08:23Z")
You are not doing what you say you are. A purchase order has no financial impact on anything. Perhaps you meant a purchase invoice. And you must be referring to action after you’ve entered the debit note as per your original description (since you still have _Supplier Credits_ in the _Equity_ group. If that is what you meant, the purchase invoice would have credited _Accounts payable_, moving the balance in a positive direction. But you also mentioned tax, and I see only a 1,000 movement. Was your purchase invoice perhaps checked as being tax-inclusive? If so, all is well, at least as far as the program working correctly. But you wanted to apply your balance in _Supplier Credits_ to the purchase invoice. To do that, you have to convert the debit note amount to income in some way, moving it from your balance sheet to your profit and loss statement. (It can be considered as income because it has provided you with the means to purchase goods, even though it wasn’t money.) Alternatively, you could convert it to a contra expense because it reduces the amount you will pay when you purchase new goods. Where you account for it, you will be applying a credit to an account you choose or create for this purpose. I’ll call it _Account X_. The solution is a journal entry, which can be entered any time after the debit note is recorded, but before the purchase invoice is entered. That way, Manager will automatically apply the available credit from the debit note to the purchase invoice. And your P&L will correctly reflect the difference between income and expenses. The final effect will be the equivalent of these double entries: From the debit note: Dr _Accounts payable =\> Supplier_ 1,000 (moving _A/P_ negative) Cr _Supplier credits_ 1,000 From the journal entry: Dr _Supplier credits_ 1,000 Cr _Account X_ 1,000 From the purchase invoice: Dr _Expense account for purchase_ 1,000 Cr _Accounts payable =\> Supplier_ 1,000 (moving _A/P_ back to zero) A few more points: - The final purchase invoice does not have to be for 1,000. Manager will apply enough of the available credit to future purchase invoices from this supplier to use it up, or will carry forward the unused portion. - Studying the debits and credits in the multi-step, equivalent process could well suggest to you a simpler approach. In fact, this would be my preference, as long as your next purchase from this supplier will be soon. The only reason I did not mention it to you earlier is that you already had your _Supplier credits_ account on the balance sheet side, and that is a fairly traditional place for it. But a more direct solution would have been to allocate the line item on the original debit note directly to an _Account X_ in the income section of the P&L. That eliminates the journal entry. The problem with this approach is the distortion of income if you are using accrual basis accounting. You have not earned that income, and may not if you don’t purchase again. - The advantages of carrying _Supplier credits_ as a contra liability account are that (a) it is visible and (b) directly reduces total liabilities by offsetting _Accounts payable_. - A totally separate approach is not to record the debit note at all at present. I think would be acceptable accounting because it has no net financial impact unless you buy something from the supplier in the future. At that time, it could be entered as a discount, lowering the price you paid. The credit note your supplier gave you (which is what you should be entering as a debit note in your books) could be retained as documentation of the discount. This would be the equivalent of _Account X_ being a contra expense account. Sorry for the long post. ---
**Author:** ![Ealfardan](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/ealfardan/32/63166_2.png) [@Ealfardan](https://forum.manager.io/u/Ealfardan)\ **Post date:** [January 18, 2023, 3:09pm UTC](https://forum.manager.io/t/suspense-account-junk/2084/14 "2023-01-18T15:09:08Z")
Closed on January 18, 2023, 3:09pm UTC