Cancel a payment by cheque to a supplier

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:24AM in AAT student discussion
Please can you help me with cancelling a cheque to a supplier in Sage when I dont have the wizard for doing this. I can get as far as doing a journal for debit Bank and credit Credit Control Account but I cant add the amount back into the Supplier's subsidiary account. Many thanks.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Have you already posted the cheque to the suppliers account, clearing the outstanding balance?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Yes, this is a question in a textbook.The cheque to the supplier has been processed in Sage but before the cheque has been posted it is discovered that the goods are faulty and we dont want pay for them until this problem is sorted out.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Hi, I have just been onto sage and have a description of what to do from sage, if you give me your email address I will send it to you, or if you dont want to broadcast your email address just PM me.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Thanks Sam. Yes I would rather not give out my email address. I have found the Wizard for write offs and the help. It does all seem rather confusing. when I used the wizard i only got one transaction on the audit trail, PR, N/C 1200, Ref CANCEL, Details Cancelled Cheque. I am using a demo version of Sage Line 50 2007.

    However the text book has 3 transactions on the audit trail:
    PI, n/c 9999, ref CANCEL, Details Cancelled Cheque
    JD, n/c 1200, ref VOID, Details Cancelled Cheque - MA001
    JC, n/c 9999, ref VOID, Details Cancelled cheque - MA001

    I dont know where the author got the journal transaction from - there doesnt seem to be mention of this in the help.

    Please let me know if any of this sounds familiar. I might try doing another cancellation to confirm that I get the same results.

    It doesnt seem possible that something as simple as tearing up a cheque can cause so much difficulty!

    This is the first time I have used this forum and I dont know what PM means.

    Thanks again for your interest and help.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    To be honest, I have never used the wizards because they confuse me. I think that the text books answer is correct.
    Because the cheque has been matched to the purchase invoice, you need to do the following adjustments:

    1. Re-issue a purchase invoice to the supplier account, posting it to the mispostings account(9999) putting it to T9.The reason for this is so it is not duplicated in the nominal. For example if it was accountancy (7601), if you were to post the second invoice to accountancy the figure will be in there twice.

    2. Do a journal to DEBIT bank (1200) and CREDIT mispostings account (9999)

    3. The DEBIT in the bank will cancel out the cheque originally posted and the CREDIT to the mispostings account will clear the second invoice posted.

    This does sound very long winded and a lot of trouble just for a cancelled cheque. But, if the cheque has been posted to Sage it will need to be adjusted for. If it had not been posted none of this would be necessary.

    Hope this all makes sense.
    If you have any other problems, let me know.

    Sam :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Our tutor told us to ignore wizards as they make it more complicated. But to cancel the cheque you would make entries in the journal to cancel it out.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Thanks so much Sam. I do understand what you are saying and the debits and credits all balance out. It seems that the textbook has told me to use the wizard whilst the author has made the correction manually as you suggested. However it does show up differently in the audit trail.The Wizard changes the Ref. of the original PP to CANCEL and introduces only one extra transaction:
    Type: PR N/C: 1200 Ref: CANCEL Details: Cancelled Cheque.
    It all makes sense with what I read about how to write of a bad debt which involved issuing a credit note to the customer using Bad Debts as the N/C and also a journal entry.
    Anyway I will go away and try what you have said just to see how it affects what comes up in the supplier activity and what I see when I attempt to make a payment to the supplier.

    I have a bee in my bonnet about being able to do book keeping exercises in Sage in order to thoroughly understand what Sage is doing in the background. I agree it is better to do the correction using logic rather than a Wizard.

    Kind regards
    Frances
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Thanks for your reply Leigh, but the problem is that a journal can only be made between nominal accounts such as Bank and Creditors Control Account.

    The problem arises in changing the Supplier's account in the Purchases ledger which is a subsidiary ledger and not part of the double entry.

    The only way to get into the customer or supplier accounts is by raising invoices or credit notes.
    If you do a journal between Bank and Creditors Control Account in Sage you get a message box saying that the Suppliers account will not be updated but without any instruction on how to do it! So helpful!
    I dont pretend to fully understand it all but I refer you to Sam's reply.

    Kind regards
    Frances
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Sam
    Just one last question. Do you know how to write off a customer account without using the wizard. If I issue a credit note to the customer with Bad Debts write-off as the N/C then is that enough. I have a feeling that there will some problems with VAT.
    Its not like the cancellation of a cheque where the misposting account entries cancel each other out. The posting to Bad Debts needs to remain so that it can be seen on the P&L sheet.

    The reason I ask is that I have been trying to work through the AAT ABC bookeeping CDROM and in order to try to make it relevant I have tried doing all the examples on Sage. However what appears to be a beginners exercise in manual book-keeping isnt always the easiest thing to do on the computer. My current teacher showed us how to extend the COA to include a n/c for Drawings. I was flummoxed by the fact that book-keeping exercises mostly deal with sole traders who are frequently making drawings and entering capital (so easy to change the name Ordinary Shares n/c to Capital I dont know why I didnt think of it myself)whereas Sage deals with limited companies.

    Anyway if you have any definitive ideas on writing off an account using standard VAT accounting I should be most grateful.

    Kind regards
    Frances
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    No worries, if you have any more queries, just let me know. Sam :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Hi Sam
    Yes there is just one last query - our last messages crossed in the ether.
    Frances
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Funny how our tutor showed us and we used it the same way in the exam.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Hi sorry it has taken so long to get back to you. I can only access the forum when I am at work because the website does not work on my computer at home.
    With the query you have. If you are trying to clear a customer account raise a credit note to clear the specific invoice. When you do this you should put it to nominal code 8100 (bad debt write off) and you should include the VAT. This way the VAT will contra off the vat on the original invoice in the sales control account. The bad debt write off will be seen as a debit in the bad debts account.
    Hope this helps.
    I know with sage if you go to file, open and click on open demo data, there is a dummy company you can practice on so if you make mistakes it wont affect the proper sage you are working in.

    If you need any more help, just yell. :D Sam :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    Thanks Sam - I got confused because I originally tried using a Journal but this isnt necessary in this case. I have just taken my C&G computerised accounts level 2 exam and am going to take a break.
    Anyhow, your help has been invaluable and I am most grateful.
    Frances :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Cancel a payment by cheque to a supplier

    your welcome if there is anything else you need help with just let me know.
    :DSam:D

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