Sales Postings

LauraY83

I wonder if you can help me - Ive wracked my brains and Im stuck!
I have the following scenario

We raised invoices in July 07 and our customer didnt pay these by Jan 08. For arguments sake lets say these invoices were for €50
They had also made an overpayment in the same month (again for arguments sake say €100) so I just posted the cash on account showing as a credit balance on their statement.

I wrote to the customer and told them about their overpayment but they never reclaimed it. So my boss told me to take the cash in and mark off the outstanding invoices so I raised an invoice for €50 and applied this invoice to the outstanding invoices and the credit note ergo cancelling them all off so the account looked tidy and balanced.

Now, the customer has paid these outstanding invoices (typical) and I had a payment I could not apply as the invoices had just been marked off. So I posted the payment along with other current invoices they had paid and posted the difference to exchange gains.

So I now have an artifical exchange gain in the exchange gain/loss account that I need to journal out.

My boss has told me to DR exhange gain or loss and CR sales ledger control account.

But on thinking about this if I post a CR to SL cont a/c my sales ledger will not reconcile at month end.

So where should this DR actually go?

The only things that should appear in SL cont a/c are gross value of invoices and payments. There are a few NL journal entries in there but they are accruals so just go in one month and out the next so not affecting the account total on an ongoing basis!

LauraY83

Thinking about it some more, would I post the CR to Sales/Turnover
Increasing the value of sales by the amount of extra cash received?

sheelagh

Sales Ledger Postings

If you think of this in terms of what has actually happened, I think you are saying that your customer has overpaid you back in July 07, and paid all his outstanding invoices, some very recently. Your sales ledger should reflect this.

There are 2 items that you need to undo to correct this -

reverse the "dummy" invoice you mentioned in your 3rd paragraph - do this by raising a credit note to mirror the invoice - same value, same nominal code, same VAT, same date, and try to add some detail that the customer will see on his statement so he knows it has to do with he overpayment.

credit his account with the money you have attributed to exchange rate gain - do this by raising a credit note for the amount you have incorrectly attributed to ex rate gain and use exchange rate gain/loss nominal code.

The total of these credit notes should be equal to the total amount he has overpaid.

Whatever you do, don't post anything directly to the s/l control account - you should post via the sales ledger - otherwise, as you say, the control account won't reconcile to the sales ledger.