Total Legal Accounting 3
SECTION 5.3.3 - CREDITOR ADJUSTMENTS
USAGE: To apply ad hoc debits and credits to Creditors. This is useful for shifting balances between accounts, and for making entries that do not affect the bank. This function is capable of shifting balances from Creditor to Creditor and Creditor to General Ledger.
DISCUSSION: Creditor Adjustments or Journals are used in many procedures or adjust or fix balances. There are several examples:
· If you wish to write off a Creditor’s balance you could enter a Creditor to General Ledger adjustment where the General Ledger account is the Creditor Write-off account.
· Special Charges such as interest can be applied via adjustments.
· If you have purchased from the wrong Creditor, you should normally enter a Return and a new Purchase, but if the Purchase has already been paid, you can shift the balance to the correct Customer by a Creditor to Creditor adjustment.
When you start the CREDITOR ADJUSTMENT program, the computer will initially ask for a Creditor code. Insert the code and press <Enter>.
To return to the CREDITOR DATA ENTRY MENU, press <ESC>.
To search for a Creditor, press <F9>. For further details on searches, see SECTION 1.2.
Having chosen a Creditor, the screen will display the name and address and recent balances, in full at the top of the screen. The screen will appear as follows:
By default T.L.A. will offer the Creditor to General Ledger option. If you wish to continue, enter a General Ledger account number (eg Creditor Write-off) and press <Enter>. You can also use <F9> to search for a General Ledger account.
There are certain accounts that T.L.A. will stop you from posting to, eg Bank, Trade Creditors. These are only posted to via other programs, eg Purchasing.
If you wish to enter a Creditor to Creditor adjustment, press <F2>. The screen will change to:
Here you can choose a second Creditor to post to. You can use <F9> to search for a Creditor. This must be a different Creditor account to the first one.
Irrespective of whether you are posting to a General Ledger account or another Creditor, when you choose the second account, T.L.A. will display the current balance of that account. The format depends on what kind of account it is.
The screen will now split into 3 parts. The top section is the Creditor details, the middle section shows the second account’s details, and the bottom section allows you to enter the details of the transaction.
An example is:
The fields available are:
DATE This is date you wish to make the transaction apply. The date does not have to be in the current period, but if you backdate a transaction, T.L.A. will not let you choose a date in a closed period. To close a period, use the CALENDAR function. (See SECTION 7.1.6.)
COMMENTS Here you must enter the reason for the Adjustment.
VALUE This is the value of the transaction. By default, this is a credit amount, ie it will increase the balance of the first Creditor. To change it to a credit value, press - . When you leave this field, T.L.A. will update the NEW BALANCE fields on both accounts (sections 1 and 2 of the screen) to show you what the effect of you entry would be, but the balances will not actually be changed until you choose to update.
<F8> If you wish to return to section 2 of the screen, press <F8> or <CsrUp> at the date field. This may be more efficient than pressing <ESC> and restarting the transaction.
<F9> This will initiate T.L.A.’s calculator. When you press <ESC> from the calculator, the result will be inserted into the value field.
<ESC> To abort the whole transaction, press <ESC>. You will then be returned to the Creditor code entry routine.
To finally update your transaction, press <F10>. You might be asked if you wish to allocate the transaction depending on the transaction type. If you choose Y, you will be transferred to the relevant allocation program and on completion, you will be returned to the adjustment program.
Files updated by the Creditor Adjustment program:
Creditor master-file: The first Creditor’s balance will be increased by the value of the transaction. If you are entering a Creditor to Creditor transaction, the second Creditor’s balance will be reduced.
Creditor transaction-file: A transaction is created to match each balance updated.
Creditor master-file: If you are entering a Creditor to Debtor transaction, the Debtor’s balance will be increased.
Creditor transaction-file: A transaction is created to match the balance updated.
General Ledger master-file: If you are entering a Creditor to General Ledger adjustment, the relevant General Ledger account will be updated. If you are entering a Creditor to Creditor adjustment, no General Ledger involvement is required. However, if you are entering a Creditor to Creditor or Creditor to Debtor adjustment, the Trade Creditors and, where relevant, the Trade Debtor’s accounts are adjusted.
General Ledger transaction-file: A transaction is posted for each transaction line.