That statement is also not true. You can record sales and purchases using receipts and payments under accrual basis accounting. And you can use sales and purchase invoices under cash basis accounting.
Unfortunately, Manager will not allow you to select accrual or cash basis accounting until the first sales or purchase invoice is created. But that is related to how reporting is implemented, not the suitability of either accounting basis.
I use several banks and some are very renowned such as Rabobank and Royal Bank of Scotland. These all present the spreadsheets with separate columns for receipts and payments. I am not sure what “standard” you refer to but all that I use have separate columns hence my struggle converting before importing. As for the earlier mention of simultaneous transactions you are right of course tht this is possible and requires one entry to be deleted to prevent double counting. As for Sales and Purchase invoices you are also right that they do not present any real money transaction cash or bank, but in my view a cheque is exactly that, it is a promise of receipt or payment until “cashed” and thus proposed here as a solution on what one can do t have cheques appear as accounts payable or receivable as the underlying expenses or revenue are “promised” similar to PI and SI until realized. I do not like cheques for the reason you mentioned that it is possible to write or receive cheques without having the balance in the bank and thus are not covered. However, you could prevent yourself writing cheques or making expenses that would bring you into the negative if the balances are positive because you have entered them as payables or receivables using invoices. I would like the better options suggested by others but in the absence thereof r the reluctance to implement them into the application this is for the time being one of the ways to make sure that all actual and expected payables and receivables can be recorded based on cheques.
I refer to any of the formats listed in this Guide except .CSV: https://www.manager.io/guides/9240. Some are more current and less trouble-prone than others. There is a difference between how a “statement” is displayed on a bank’s web site or in an exported file and one that adheres to a defined standard. Few of those, when you burrow into them, involve columns at all. Most use repetitive blocks of data with defined headers, opening and closing tags, and so forth. Some distinguish between deposits and withdrawals only with a negative sign. Others use different header codes. Most were designed for exchange via serial data interfaces—in some cases, literally, by teletype.
The difference in accounting is that a cheque is a negotiable instrument, only slightly less liquid than physical cash. Sales and purchase invoices establish receivables and payables between entities and are not monetary instruments. Invoices must be settled with monetary instruments of some type. Regardless of how you may view them, treatment of cheques in the accounting world is very well and long established. Neither you nor Manager’s developer is going to change that. Cheques are not invoices. Nor are they receivables or payables.
What the software others have described does is effectively note parameters of cheques without entering them as transactions in the accounting record. Transaction entry occurs only when the bank statement is imported. This is functionally equivalent to keeping a copy of a deposit voucher. That approach involves more steps than Manager’s manual entry method, using the Pending/Cleared status.
In my country cheques are legally binding promise to pay a written amount in particular date.
if we fail to honor our cheques we can even go to jail. so i dont understand what you mean by cheque are not receivable or payable. also if one fail to honor an account payee cheques given to any company banks charges fines by deducting fine amount from bank balance.
in my country we issue a post dated cheques for payment of purchase invoice and we receive post dated as payment for sales invoice most of times as it is more secured.
In accounting, receivables and payables are obligations owed to you by your customers or owed by you to your suppliers for goods or services. They have not yet been collected or paid. A cheque, on the other hand, is a financial instrument used to pay for the receivable or payable. A cheque is a substitute for hard currency. Once you have a valid cheque for it, a receivable or payable ceases to be.
Note: Your practice of post-dated cheques is actually illegal in many countries. And dishonoring cheques is illegal almost everywhere. That is much like passing counterfeit currency. Both those issues are irrelevant to the distinction between cheques and receivables/payables.
Let me try to phrase it a different way as you also rightly so, promote “modern” ways of doing things. In the past before e-payments using checks where the way to go in accounting, that is why bank accounts often were called checking accounts. It was a way not to have to pay cash and as such you are right it only represents a monetary transaction. The point here is how to record these pending ones as money transfers, POS, etc are much quicker payments and more importantly does not get the receiver or payer into trouble by overspending, ie not having checks covered. Why so many including myself do not all payment by check at all and will not issue a check either is because of this trouble. This discussion is about how to prevent an illegal overdraft by paying more by check than covered by the bank because of uncleared checks. As only when they are cleared they become a payments or receipt. As such checks are in nowhere land, they represent cash not products but if one does not record these uncleared payments and receipts somewhere in the accounts it is impossible to know the status of these accounts. The problem is how to represent these pending payments and receipts in Manager. So I tried to suggest something completely imperfect in the absence of any changes in the application as asked for by others but strongly resisted here because they would represent double entries (payment evidence from bank statement rather than the check). As checks need to be cleared to be an actual payment by bank and thus in itself represents currency but isn’t of the same level as cash or bank receipt (as rightly acknowledged in Manager), how can we securely manage our finances in case when accepting or using checks. That is the question. I agree that putting them in Invoices and Bills is confusing as these do not represent payment or receipt as cash and bank statements do, but as far as I can see in Manager these are the only locations with a deferred time element and thus at least like encumbrances show that something is order and “paid” for without having actually cleared the payment. As mentioned before some suggestions relating to modifying the application to deal with checks properly are far better but they seem to have been rejected ofhand and no real solutions to at least cope with this in Manager are proposed. I would really welcome clear advice on how to deal with this better in manager.
in my country it is very common to pay purchase invoice from cheque. and it is not illegal.
The problem is that to understand why i am asking for a solution, you have to simulate the situation.
You have 20 invoices
You receive 20 cheques as a payment
Those cheques are deposited as a single amount
If you want the transactions in the system to match the bank statement, you have to enter one big amount in the bank account on the system and split it between all the invoices.
That’s where things gets complicated. Even if you enter the customer and the invoice number the amount is not automatically imported in the amount field. So you have to search through the invoices to note everything to enter the right amount for every invoice
What i ask for is a feature that would permit us when we receive check to enter on the system the check number, what customer and what invoice number it is related to and the amount. Just like a virtual drawer.
Then when we upload the big deposit se could select from a list the cheques related to the deposit, the customer, amount and invoice number would be entered automatically on the line. Only then the payment would be applied on the invoice
Afterward if you have to check this transaction un the future you could see on one window the big amount as in your bank statement and the split with cheques numbers, customer and everything
The point is that you not only have to enter transactions in the system, you have to go back to see what was done before and it can take a lot of time only to reconcile one transaction like this
As I mentioned in a previous post in this thread Manager does not have an inbuilt undeposited funds setup that some other accounting software systems have.
It is possible to manually set up in Manager something that would simulate this. Here is what you can do:
I did not say it was illegal to pay a purchase invoice with a cheque. I said in many countries post-dated cheques are illegal. I also wrote, “Once you have a valid cheque….” In your country, after the issue date on a post-dated cheque arrives, you have a valid cheque.
what i do when i get payment via cheque for sale invoice is following
i have created a separate cheque receipt account like bank account.
when i get post dated cheque as payment for sales invoice. i record in receipt in cheque receipt account and show the date as pending.
when the cheque get cleared on that day I change the pending status of cheque to cleared status with date
and then i do inter account transfer to bank account if cheque is deposited in bank. if the cheque is cashed then i do inter account transfer to cash account.
and for payment made via cheque by my company i show it as payment only after cheque balance is deducted in my company,s bank account. is it right?
You can do that if you want. But I do not see that you are accomplishing anything besides extra work and creating phantom bank records you will not be able to explain to investors, managers, or auditors.
When you receive a cheque you intend to deposit into your bank account, you could just enter the receipt, posted to your regular bank account, and mark it as Pending. Manager will show you the cleared balance and actual balance in the Bank Accounts tab. When it clears, change status to Cleared. I see no benefit to creating the artificial bank account. And the inter account transfer would be unnecessary, especially since you will never be able to show an auditor any transaction corresponding to it.
When you receive a cheque you intend to place into a cash account, just enter the receipt with the future date of the cheque, posting it to the cash account. Manager will ignore future-dated transactions until the date arrives. (You will see a notice about future-dated transactions on your Summary page.) Again, no inter account transfer would be needed.
You can also use the future-dating process with bank accounts.
What’s the point of telling me that Manager does’nt have this feature when i point out exactly that it would be great if Manager had this feature…
I know that Manager doesn’t have this feature. I am just saying that this feature would make this software better that’s it.
The point was that @AJD was addressing your suggestion, telling you a creative way to obtain the same result with available features. It was an introduction to the solution that followed.
I kind of feel you want to force Manager into QuickBooks. When I started using Manager, I was forcing it to work like Tally ERP and QuickBooks but now I convince companies to dump Tally ERP and QuickBooks for Manager. Because Manager is better.
Once you receive a cheque from a customer, the system has to capture it immediately and leave the cheque with uncleared status (correct accounting). Just because you haven’t deposited it does not mean the cheque shouldn’t be registered in the destination bank account. Waiting to pile up cheques in some virtual box and later make a big deposit is a wrong process.
You can make your own virtual cheque box with Manager. Just create another Bank account and maybe call it ‘Cheques Recieved’. When cheques are received here (Cheques Received) it should be captured to credit the customers account immediately. Use transfer money to transfer the bulk amount into the final resting bank account for those cheques to complete the process.
You can create custom fields to add extra fields to capture all transaction details you want to capture.
Wait, at this point I have realized @AJD has posted a process with the same workflow I’m suggesting.
The point is that QuickBooks virtual cheque box or whatever is not the best.
You can also simply use one receipt form and select all the accounts receivable accounts (Customers) involved and capture it.
All softwares cannot be the same.
You Say that Manager is better than other softwares. Can you tell me why you think that? ( I don’t say it’s not true but a statement like that without explanation has no value)
Why is the Quickbooks process with check is not the best? ( Same as the previous question )
In a medium size business you don’t have to Wait that long to pile up 10 to 15 check. Where i used to work we were making 1 check deposit a week and it was a governement institution where there was almost no receivable apart from some Room renting.
I didn’t enter all the reasons why Manager to me works better because it may have led the discussion away from the topic.
But here are a few points:
You pay for the features we access for free in Manager (such as the Fixed Asset Management and Payslips in other software like Tally ERP and Quickbooks.)
QuickBooks is slow to start, takes a lot of system resources. Manager is lightweight but highly customizable and does all the Accounting Work with a simple user interface.
Take Manager’s Bank Accounts dashboard, you can easily access pending deposits and pending withdrawals.
The server edition trial period is unlimited and you still have access to features you will pay a lot for in other accounting software (e.g unlimited users)
The cloud version also gives you access to free cloud storage (Unlimited)
etc etc
As a software user, you must be willing at certain times to change some of your processes to adapt to the software. (I’m not suggesting you adapt to bad software, Manager is great software)
I have never considered importing bank transactions into Manager (except on occasions where a new user wants to import old transactions into Manager). I find importing statements instead if building the cashbook live as leaving room for errors. I tie internal controls to the payment and receipt process and it is extremely important for the cash books to mirror the bank statement at every moment. (I understand not all users have the time for that, especially professional bookkeepers with many clients)
Those are all good reason to like the software. I don’t want to force Manager to act like Quickbooks because i only made a certification on Quickbooks because a lot of employer are asking for this skill. I am not a regular user of Quickbooks. I’ve been using Manager since a couple of years more to keep track on my personal finance. I know it’s a bit overkill but since i was studying accounting i wanted something with double entry accounting to be able to apply what i was learning in school. Now i am in a process of checking how all the diffrent modules works and what workflow i have to use with all the different processes. That’s why when i have a problem with a process i ask why it’s working the way it is.
I am trying to understand how the developpers of the software decided to treat this process and if there’s a way to make it better.
@Ealfardan Yes I am in agreement with what you are saying. You need some way to record cheques paid and cheques received. Which is what I was proposing. To retain bank imports, but to have some kind of clearing area where you can record cheques and their numbers and clients/suppliers etc and Manager on bank import is able to sync with those clearing entries based on amounts and dates or at the very least you can link those clearing cheques (paid or received) with the bank import amount.
The cleared and uncleared concept works very well in Manager - the problem is as the OP stated you cannot enter this and do bank import. I am agreeing with the OP and yourself.
@Abeiku I am in agreement with you that too often people try to get a new accounting program to work the same way as their old accounting program as we are used to a certain process. However, I agree with the OP - Manager should implement a proper way to record cheques and cash that has not been paid/received/deposited because people can’t always go to the bank every 5 minutes.
Your solution does not work with bank imports because you would be working with two bank accounts doing transfers etc. It’s not really the simplest way to handle it and is bad enough if you only have one bank account, but some businesses have several and may need to pay cheques to and from several.
@lubos Would you consider adding this to the ideas category because the OP does have a valid request. I think that the inability to record cheque numbers and process cash in real time is probably one of the reasons why so many people waste time doing payments and receipts manually instead of automating it with bank imports. But you cannot import bank statements and record cheques in a clearing area and then link the two up.
You are back to suggesting doing things twice. If you are willing to manually enter cheques into some form of holding queue, with numbers, dates, amounts, descriptions, etc., why bother with importing the statement? Why not rely on the existing Pending/Cleared status? What benefit do you gain in this case from the import you obviously like?
I fully understand the attraction of importing bank statements, especially when transaction volume is high. But nobody has yet set forth a convincing argument to justify entering cheques manually and still doing the import, especially in a business like yours where you say there are no cash transactions.