Hi everyone,
I had some questions and wanted to clarify a few things to better understand for future purposes. If I import open vendor payments after having already imported the opening balances. This would create double entries in Accounts Payable, correct?
Cause I’ve been told that the best practice is to correct or reverse the AP total from the opening balance that was imported last week before importing detailed vendor entries
The thing is I also came across information suggesting that when importing vendor payments, using the Purchasing (AP) G/L account as the balancing account could prevent duplication.
Can anyone confirm whether this approach eliminates the need to reverse the AP total, or if the reversal is still required?
Best regards,
It sounds like you’re perhaps importing history? I have actually got a YouTube video on why this is super hard to do and I recommend against it … but if I am wrong this is what I understand.
When you enter an opening balance you can always enter a transaction so it Debits and Credits the same account. So for an AP transaction you would create a Vendor Credit or Invoice (for example) where the expense account on the invoice is the Accounts Payable account for that vendor. Then you have it in the subledger but the G/L is net 0.
Now if you have open un-applied vendor payments prior to go-live, I suggest you apply them in the old system to the maximum amount possible.
If this is to create payments for past invoices you’ve loaded and posted, then I believe your application to the AP G/L account should relieve the AP aged amount owning but create no net change to cash or the AP open balance (which is what I think you want).
The AP open balance should remain unchanged - just run a TB and make sure it still matches the expected TB.
Ultimately you want the Trial Balance to match the old system on the go-live date, and the Aged AP to match the aged AP from the old system. If those two match you’re golden.