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This text refers to program version 4.3  

Account Usage S/L - Debtors Card

Debtors

When you approve an Invoice (i.e. post it to the Nominal Ledger), its value including VAT will be debited to a Debtor Account. When you enter a Receipt, its value will be credited to the same Account. This Account therefore shows how much your company is owed at a particular time.

Enter here the Account Code of the Account that you wish to be used as your Debtor Account. It will be overridden if a separate such Account has been specified for the Customer Category of the Customer.

Cash

The Account entered here will be debited instead of the Debtor Account whenever you approve a cash sale (Cash Note). Please refer to the description of the Payment Terms setting for details of Cash Notes.

The Account specified here will be overridden if a separate such Account has been specified for the Payment Term used in the Cash Note.

VAT (C/A)

This Account is used for two purposes.

First, the Post Receipt VAT and/or Post Prepayment VAT options elsewhere on this card allow you to account for VAT based on Receipts. When you approve a Receipt, VAT will be moved from a temporary VAT Output Account to the final one. Usually, the final Output Account will be the O/P Account specified in the VAT Codes setting. If a particular VAT Code does not have an O/P Account, the VAT amount will be credited to this Account instead.

Second, this Account is used if you need to reduce VAT when you give a cash (settlement) discount. Please refer to the description of the Cash Discount VAT Account below for details.

Round Off

The total and VAT amounts of each Invoice will be rounded up or down according to rounding rules defined in the Round Off setting in the System module. Whenever you approve an Invoice, any amount lost or gained by this rounding process will be posted to the Account specified here.

This Account can only be defined in the Account Usage S/L setting and is therefore used in Transactions generated from the Purchase Ledger as well.

Cash Discount

In the event of an Invoice attracting a settlement discount when it is paid on time, the Account specified here will be debited with the discount amount. You can define settlement discounts using the Payment Terms setting.

Cash Discount VAT

If you need to reduce VAT when you give a cash (settlement) discount, specify here the Account that is to be debited with the VAT reduction. The balancing credit will be to the VAT (C/A) Account. For example, you have a Payment Term with a 10% early settlement discount and you enter an Invoice worth 100 + 17.50 VAT. When you enter the Receipt, the settlement discount will be calculated to be 11.75. This figure will be debited to the Cash Discount Account specified above. If you have specified a Cash Discount VAT Account, 1.75 VAT from the cash discount will be debited to this Account and credited to the VAT (C/A) Account. If you do not specify a Cash Discount VAT Account, the final two postings will not be made.

The use of this Account depends on local VAT legislation.

Bank Fee

Enter here the Account Code of the Account to be credited by any bank charges that you may incur when banking Receipts.

Objects on Debtors A/C

When you approve and save Invoices, any Objects specified on the 'Terms' card will be assigned to the credit posting to the Sales Account(s) when a Nominal Ledger Transaction is generated. If you have checked this box, they will be assigned to the debit posting to the Debtor Account as well.

Sub-ledger Checking

Check this box if you want to use the sub-ledger checking feature in the Sales Ledger. This will mean that you will only be able to post to specified Accounts (such as Debtor Accounts) from the sub-ledger (i.e. from Invoices or Receipts in the Sales Ledger). If you then try to post to a controlled Account directly from the Nominal Ledger (using the Transaction register) you will get an alert message.

You can use this feature, for example, to ensure that Receipts are received in the Sales Ledger rather than by journal in the Nominal Ledger. Using the Nominal Ledger for this purpose is incorrect because the Receipt cannot be allocated against the appropriate Invoices. The feature also removes the risk of posting accidentally to your Debtor Account in Nominal Ledger Transactions.

For this feature to work, you must specify the Accounts which are to be included in the sub-ledger checking function (i.e. the Accounts which are not to be used in the Transaction register). Do this using the Control Accounts setting in the Nominal Ledger.

Note that this check box is used to control whether sub-ledger checking will take place for specified Sales Ledger Accounts only. There is an option with the same name in the Account Usage P/L setting that performs an equivalent function for Purchase Ledger Accounts.

Invoices Update Stock

This option has two effects. First, it indicates how an Invoice is to update stock levels. If you are using this option, FirstOffice will reduce the stock level of each Stocked Item in an Invoice by the appropriate quantity when it is approved. No check of the availability of stock will be made, unless you are using the Do Not Allow Over Delivery option in the Stock Settings setting in the Stock module. The second effect is to include cost accounting postings (for use when maintaining stock values in the Nominal Ledger) in the Nominal Ledger Transaction generated when you approve the Invoice.

This option is only used when you issue Deliveries directly from an Invoice (i.e. where no Sales Order exists). Otherwise, stock levels are depleted when Deliveries are issued from the Sales Order register.

You can change the setting in an individual Invoice using the Update Stock check box on the 'Delivery' card.

Full details of cost accounting in FirstOffice can be found here.

Turnover Incl. VAT.

This option can be used in Russia. Check this box if you would like turnover to be recorded inclusive of VAT. In this case, whenever an Invoice is posted to the Nominal Ledger, the amount credited to the Sales Account will include VAT, and the VAT Amount will be debited from the same Account.

VAT Code Control

This option controls the choice of VAT Codes in Invoices. When you enter an Item in an Invoice, the VAT Code is taken from the Customer, Item, Item Group or the 'VAT' card of this setting. If you are using this option, this VAT Code must match that specified in the Sales Account (in the Account register). If this is not the case, the following warning message will appear when you try to save the Invoice :

The warning will not appear if a VAT Code has not been specified in the Account record.

If you are using this option, it is recommended that you specify VAT Codes in all your Sales Accounts, and that you take care to specify the same VAT Codes in your Customers, Items and Item Groups and in this setting ('VAT' card), to prevent possible conflicts.

Post Receipt VAT

This option allows you to account for VAT based on Receipts (rather than Invoices) and On Account Receipts. An On Account Receipt is a Receipt with no Invoice Number or Prepayment Number. If you need to use this option, you should enter O/P Accounts for all your VAT Codes (in the VAT Codes setting in the Nominal Ledger), or at least a VAT (C/A) Account in the field above.

The accounting of VAT based on Receipts is a requirement in the UK for users of the Cash VAT scheme. If you are using the UK Cash VAT scheme, you should also ensure the Post Prepayment VAT option below and the equivalent options in the Account Usage P/L setting are switched on. The Cash VAT scheme is described on the VAT Codes page. Users in Poland can also use this option and the Post Payment VAT option in the Purchase Ledger, but should not use the Post Prepayment VAT options.

Users in Latvia should leave this option switched off but should turn on the Post Payment VAT option in the Account Usage P/L setting.

This option cannot be used in Russia.

Post Prepayment VAT

This option allows the posting of VAT from Prepayment Receipts, a requirement in the Baltic countries and for users of the Cash VAT scheme in the UK. A Prepayment Receipt is a Receipt without an Invoice Number but with a Prepayment Number specified on flip C. If you are using this option, you should also specify a Prepayment VAT Account in the field on the 'Exchange Rate' card.

Exclude VAT on Cash Discount

Use this option if the settlement discount percentage (defined in the Payment Terms setting) is to be applied to the Invoice total excluding VAT. Otherwise, it will be applied to the total including VAT. This option is likely to be used in the UK only. The check box applies to the Sales Ledger only.

For example, you have a Payment Term with a 10% early settlement discount. If you are not using this option, when you enter an Item worth 100.00 in an Invoice, VAT will be calculated on the full 100.00. At the standard rate, this will give an Invoice total of 117.50. When you enter the Receipt, the settlement discount will be calculated to be 11.75. This figure will be debited to the Cash Discount Account specified above. If you are using this option, when you enter an Item worth 100.00 in an Invoice, VAT will be calculated on 90.00 (i.e. on 100.00 less the 10% discount), giving a figure of 15.75 at the standard rate. This will give an Invoice total of 115.75 (100 plus 15.75 VAT). When you enter the Receipt, the settlement discount will be calculated to be 10.00. This figure will be debited to the Cash Discount Account specified above.

Base Price

Use these options to specify whether the Base Prices in the Item records are to include VAT. VAT rates are defined in the VAT Codes setting in the Nominal Ledger.

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