Year End posting to Accounts Receivable

Question

Helping a friend who's computer crashed, losing all her company data. Got the accountant to send last years ending balances and started from there. For account receivable and account payable balances, I set up a new account - Accounts Receivable-unlinked for YE ( love your advise Rita Deering) and the same for Accounts Payable. 
 Finally got the Vendor aged summary and the Account Receivable summary from the accountant and I am ready to start posting the outstanding vendor and customer information. Stumped! 
 If I post the vendor invoice on the 1st day of the year ( to make that vendor's account correct), it credits the account receivable, which is what should happen, but I don't want the debit going to sales, as it was already in sales last year. If instead of using sales I use the "Account Receivable-unlinked for YE" account that I set up, it would put it in as a debit, when I really need a credit 
 How do I post so the vendor's account get the amount in account payable, not put a debit in sales, and get a credit to the "Account Receivable-unlinked for YE". This will also be the problem on the accounts receivable side too when I start there. 
 Thanks in advance for all the help. I have used this forum, and the one before it, (showing my age) and love it. Thank you for all the expert advisers, Rita, you always seem to answer my questions, before I have them. ; )

Richard S. Ridings · Accepted Answer

Hi EMaude 
 Rita's advise was always helpful, to the point and very accurate. I am sure many here agree she has been missed . 
 I think you need to step back and break down exactly what you are trying to do. I have always taught that you should put into English what you are trying to do, but I don't always stress that you should listen to what you are saying :). 
 EMaude said: If I post the vendor invoice on the 1st day of the year ( to make that vendor's account correct), it credits the account receivable, which is what should happen 
 I think you have confused money in and money out. First you talk money out but you want it to go to the money in holding account. If you are starting with vendors, you should be in Accounts Payable. I am assuming you missed on the text, and that the setup in your file is correct. 
 If you are posting a customer invoice, a positive number in the amount column in the sales module will always credit the account referenced in the account column on the same line. If the entry is Pay Later, then the Accounts Receivable account should be debited if the total of the invoice is postive. 
 If you are posting a vendor invoice, a positive number in the amount column in the purchases module will always debit the account referenced in the account column on the same line. If the entry is Pay Later, then the Accounts Payable account should be credited if the total of the invoice is postive. 
 You can look at the journal entry on the Report menu before you post to make sure you are doing the correct thing. 
 Now I am going to assume the amount owing for a vendor invoice that should be in Accounts Payable and already properly recorded for year end as an expense, is really in the Account Payable - unlinked for YE liability account and you really want it in Accounts Payable. Let's say that total amount including any sales tax is $113 and this is the only invoice you need to post. The balance of this account is now $113. I will assume it is showing as a positive number on the balance sheet and therefore is a credit balance. I have to do all this assuming because you did not tell us, but based on the logic of what you are trying to do, I should be pretty accurate. If not, let me know. 
 Enter an invoice in the Purchases module, selecting the appropriate date you want, the proper vendor and the invoice number. You might consider using the year end date instead of the first day of the year if you are using an older copy of her file. This way the reporting will match the accountant's year end trial balance more accurately. If you started a new file and only set it up for the new year, then you can use the first day of the year as you indicated, but don't post any other live entries that day so you can use that day for balancing with the old records, in case an audit requires the need for comparisons. Easier to do without removing this year's entries on that day. 
 On the line you can enter any text you want in the Description that indicates this is a setup entry from year end figures to recover from the crash. 
 Enter 113 in the amount column and enter the Account Payable - unlinked for YE in the account column. 
 If you now look at the Journal Entry from the Report menu, you should see the Account Payable - unlinked for YE being debited and the Accounts Payable account being credited. The original balance was a credit of $113 and now you are debiting by $113 which of course, brings the balance back to zero again and the total of the outstanding invoices are now in Accounts Payable as soon as you post. 
 Then you can, at any time, go to Payments and pay the bill as you normally would. 
 For sales invoices, you do the same thing but use the Account Receivable - unlinked for YE asset account. The original balance of this account would be a debit balance and when you post to it through the sales module, you will be crediting it and debiting the Accounts Receivable account. 
 Those unlinked YE accounts should go back to zero again when you are completely done. This is an advanced trick used by many consultants to quickly get a file setup under some circumstances. It is not the easiest concept to work with but once you piece it apart and look at each entry required based on the logic for what you need to accomplish, it works quite well. I did this last when I merged two companies into a file that existed already. 
 Hope this helps

Richard S. Ridings · Answer

Glad you have it worked out. It's funny, I don't think I have ever seen an accountant NOT show credits with parentheses on their trial balances. I think it's a rule that they can't keep their accreditation if they don't :) I am surprised you balanced though when you entered the opening balances. 
 If you decide to change the date on those other entries on day 1, I would just adjust and change the date, not reverse and reenter. Adjusting means you will spend 5 minutes doing it vs. a half hour the other way.

Sage 50 Canada

Year End posting to Accounts Receivable

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