This article will mostly apply to the Customers and Suppliers modules. It will often refer to Date Based and Period Based methods of accounting in Attaché. Refer to Date or Period Based accounting in Attaché.
The main problem with transactions being entered early is whether or not they should be reported in the current period. For date based this is generally not an issue for invoices, credit adjustment notes, and other document-based transactions because when posting to the GL a date range is used. Subsequently when reconciling to the GL a date-based report is used. Therefore, the transaction will appear in the reporting period that matches its date and as such be reported in the correct reporting / GL period irrespective of when it is entered in Customers / Suppliers.
However, for Period Based and sometimes for early payments generally, entering a transaction early can be a problem because then financial reports, tax reports and lodgments, tax payments, etc. will be incorrect. This is especially a problem if the value of the transaction is significant.
Two further complications need to be considered:
Once an End of Period has been run it cannot be reversed other than by restoring the dataset.
If the End of Period is also an End of Year, then the last period will be in an historical company.
With Date Based, neither End of Period or End of Year need to be run. However, End of Year is recommended. If you would like information on switching to Date Based refer to our article: Move Customers and Suppliers from Period Based to Date Based.
Some example situations of early entered transactions are given below. Choose the one that matches your query. If you do not see one that suits your query, please raise a new case online and reference the title of this article. We may then add to this article.
Transaction was entered early, in the period before the correct period
Work through the following questions:
Do you use Date Based or Period Based for the module?
Date Based: Then the entry of the transaction is not a problem.
If in the last period for the year: The transaction's GL entries can be held in GL Postings until GL End of Year. Once End of Year is complete the GL Postings can be posted to the first period. The transaction will not appear in your EOY reports because date based EOY reports will be used.
If the transaction was posted to the GL, then GL posting will need to be reversed and re-entered to the correct period.
No further steps are required.
If not the last period: Simply post to the correct GL period based on the transaction date.
No further steps are required.
Period Based: The transaction will be included in the current period and will appear on your current period reports.
Go to the next step.
Has the Period/Year End been run?
Yes: Then your options to remove the transaction are limited because a Period/Year End cannot be undone in Attaché.
Move to the next step.
No: The transaction can be reversed and removed from the period. See:
No further steps are required.
Is the value of the transaction significant?
Yes: The impact on the financial reports will be large and could result in higher taxes, etc. In this case removing the transaction from the period is probably worthwhile.
Go to the next step.
No: Then removing the transaction from the period may not be worthwhile at this point. However there is a shortcut method.
Go to the next step if you want to consider all options. Otherwise no further steps are needed.
Do you want to entirely remove the transaction from the Customers or Suppliers module?
Yes:
IMPORTANT NOTE: This method means that all transactions entered in the Live company since the End of Period / Year was run will be lost.
In order to fully remove the transaction from the last period of the year a restore of the live company to a point before the End of Period / Year was run is required.
Before beginning archive your live company using File, Archive Current Company.
Then use File, Restore Company from Archive and choose the most recent archive that would contain the early entered transaction
Reverse the transaction as per Step 2 when the End of Period / Year has not been run and come back to this point.
Re-run any End of Year / Period, including reproducing all reports, that was/were reversed by the restore. This could include the Products module as well depending on the type of document reversed and the line types on that document. To do this:
If End of Year: work through Attaché Accounts Australia: End of year Quick Reference Guide, Checklist and other resources.
If End of Period: work through the relevant Period Based End of Period Checklists again. See:
Customers end of period procedure and checklists - date based and period based.
Suppliers end of period procedure and checklists - date based and period based.
Re-enter any transactions entered after the End of Period / Year
No: Then a 'workaround' method to remove the transaction can be used:
If the transaction was incorrectly entered in the last period of the year
process General Journals in the GL in your History company to remove the effect of the transaction from June.
Make manual notes on your End of Year reports to recognise the effective change in the report's balance and to reconcile it to the new GL balance.
Import opening balances to your Live company.
For more information refer to our article Import opening balances after entering last year adjustments?
Refer to our article on Chart re-add necessary if you receive that error message
Reverse the General Journal adjustments made above in the first period of your live company.
Make a note that for the first period reversal adjustments above will need to be manually made on your End of Period reports in order to reconcile to the GL balance.
If the transaction was entered in a period other than the last period (periods 1 to ~11).
process General Journals in the prior period in GL to remove the transaction.
Make manual notes on your Period End reports to recognise the effective change in the report's balance and to reconcile it to the new GL balance.
Reverse the General Journal adjustments made above in the current period.
Make a note that for the new period reversal adjustments will need to be manually made on your End of Period reports in order to reconcile to the GL balance.
A Customer payment was entered early
The effect of a customer payment entered early depends on the situation. Consider the following points:
If the customer payment was entered against a customer but not allocated to an invoice, this will reduce your Accounts Receivable / Trade Debtors balance
This type of payment is known as a prepayment.
It may not be correct to recognise a prepayment by including it in Accounts Receivable because the prepayments will reduce the value of Accounts Receivable.
This is especially the case if the prepayment is significant in value, or if in total are significant in value.
Discuss any high value prepayments with your Accountant. It may be necessary to recognise them in a separate Prepayment account and only apply the customer payment when the invoice is raised. This is because high value prepayments could have significant implications for your business, e.g.: when financing.
Alternatively, the customer could be invoiced in stages, for example, an initial deposit type invoice could be raised and then one or more subsequent invoices.
The customer payment then becomes a standard payment of an invoice.
However, if the value of the prepayment/s are immaterial, then entering the Customer Payment against the customer and not allocating it is acceptable.
An early customer payment may affect your BAS:
Accrual basis: No effect, only a Customer Invoice or Credit Adjustment Note will affect the BAS.
Cash basis: The customer payment value is recognised when applied to an invoice.
A Supplier payment was entered early
Early supplier payments may be required for purchase of items or for imports.
If the purchase is immaterial in value, simply enter the payment against the Supplier as unallocated.
For higher value purchases, it may be better to post these through the GL to a Prepaid Expense account or similar. Talk to your Accountant about the best way to handle the particular transaction.
The Goods Received Note and Invoice once received from the Supplier should be dated and posted to the period in which they are dated.
The supplier payment can then be posted in Suppliers.
An early supplier payment may affect your BAS when:
Accrual basis: No effect, only a Supplier Invoice or Credit Adjustment Note will affect the BAS.
Cash basis: The supplier payment value is recognised when applied to an invoice.