Old Data

Hello All:

I have a questions.

We have a ton Sales orders in delivered status but not yet invoiced from 2004. Most of the payments have been recieved and the customer do not owe anything.

How do I close all these sales orders? I was going to change the Salesline amount to 0 and the post all the invoices.

Then later make adjustment to to the Cost of goods account to a value before I do the Invoicing of old orders.

What do you guys think? Is this the best way to do this? Am I missing anything?

Thanks
Abby

How does the customer owe you nothing if you never invoiced them but they have paid you? This makes no sense. Prior to doing anything with the data fully understand where you are with the account, this will then aide you in your approach to the solution. Not sure how COGS can have been correct if you never invoiced it, I would invoice with 100% discount, but it depends upon any reporting metrics on the sales order lines. I would also be tempted to invoice it, then enter a negative line and write off the returned stock. I may also be tempted to invoice it and then credit it off with an ad hoc customer credit transactions. It really depends upon the data and reasons.

Hello Adam:

Well some of the customers went bankrupt and some of the sales orders are returns but credit never issued while some others we missed invoicing them and in 2007 reached a settlement to pay part of the money owed. This was beyond my time here.

I have the parameter post packing slip in ledger unchecked under AR → Parameters

So there is no voucher transactions for packing slips. When I invoice the COGS and Inventory accounts gets deited and credited accordingly.

So that is why I was thinking to adjust the COGS to a value before invoicing.

Thanks
Abby

The inventory account will be the reduction of inventory, it means financially you have been overstating your holding for 7 years, I doubt this I would guess these have been corrected off, so you could contra the COGS and inventory, the issue is you need to take each transaction individually and assess it. For example if the customer went bankrupt the liability should have been written off, it was not because it was never invoiced, meaning has it been declared as GSNI for all these years. As an accountant you would need to know what action was taken when financially, what financial impact the change you are making will have and then how you approach the closing off of each order. Although if no one has noticed this for 7 years you could probably just invoice it all off, not make a COGS adjustment and then write a load into suspense and no one would notice [:D]

Get this data into test, assess where the current financial transactions are, or where they were adjusted. Close the transactions, make your adjustments and ensure you are happy with how the net results is presented in the accounts. A massive job I would guess.

Hello Adam:

I dont see how the inventory was adjusted manually since doing a physical year end will not change the inventory in a perfect world scenario where on hand matches the counted qty. The packing slip process only changes the on- hand qty and nothing else. So unless they have been manually updating the inventory to match teh inventory report, I dont see this being adjusted.

So invoicing these sales orders will correct the inventory account but the COGS will also be corrected, however the entry must be reversed for this month and applied to the year end of the all the years these orders were shhipped out. That is my take on it.

The deadline to file claim against these bankrupt customer is past due, but yes, I am doing everything in teh test company and have the accountants look through

Thanks
Abby