Accounts Receivable
Starting Balances
Accounts Receivable Starting Balances
Manager's Accounts Receivable Instructions
Starting balances exist only if you are transferring an existing business to Manager from another accounting system. In that case, you may need to set starting balances for customers who, on the day you begin using Manager, sometimes referred to as the start date:
- Have available credit unrelated to sales invoices, or
- Owe you money because of unpaid sales invoices.
Before you can enter starting balances for customers, the customers themselves must be created.
Enter available credit
Available credit refers to any amount you owe your customer on your start date. This credit could be the result of past credit notes, settlement of contract disputes, or promised refunds. If your customer has a credit balance that can be applied to future invoices, go to the Customers tab and click Edit beside the customer’s name.
Enter the Starting balance of the available credit:
Click Update.
Note
The available credit must be entered in the currency selected for the customer.
The available credit must be entered in the currency selected for the customer.
Enter unpaid sales invoices
You cannot enter the starting balance for unpaid invoices as a single figure. Manager requires you to enter specific unpaid invoices, fully completed. This is so Manager can generate accurate cash-basis reports. Even if you do not adopt cash-basis accounting, it is important to enter all unpaid sales invoices so you can issue detailed customer statements and enter eventual receipts against the correct invoices.
Enter a starting-balance invoice in the same manner as a regular sales invoice. The Issue date field will, by default, be prefilled with the current date. Edit this to match the original issue date from your old accounting system.
Manager uses these pre-start sales invoices to establish starting balances in Accounts receivable. They will not affect profit and loss statements during the current or later financial periods. If an invoice has been partially paid on the day you begin using Manager, only its remaining balance due should be entered.
When finished, click Create to save the invoice. Repeat for all open sales invoices preceding your start date.
Notes
Carefully consider inventory items on pre-start invoices. If items on a sales invoice were already delivered under the prior accounting system, add the quantities back to the starting balances for those inventory items, because the pre-start sales invoice tells Manager they are being delivered again.
Carefully consider inventory items on pre-start invoices. If items on a sales invoice were already delivered under the prior accounting system, add the quantities back to the starting balances for those inventory items, because the pre-start sales invoice tells Manager they are being delivered again.
If invoices include taxes, these amounts are carried over to the Taxes payable account.
Quick Start Accounts Receivable Instructions
If you are using the accrual basis of accounting, I've provided an alternate and quicker way for entering your unpaid sales invoices.
Starting balances exist only if you are transferring an existing business to Manager from another accounting system. In that case, you may need to set starting balances for customers who, on the day you begin using Manager, sometimes referred to as the start date:
- Have available credit unrelated to sales invoices, or
- Owe you money because of unpaid sales invoices.
Before you can enter starting balances for customers, the customers themselves must be created.
Enter available credit
Available credit refers to any amount you owe your customer on your start date. This credit could be the result of past credit notes, settlement of contract disputes, or promised refunds. If your customer has a credit balance that can be applied to future invoices, go to the Customers tab and click Edit beside the customer’s name.
Enter the Starting balance of the available credit:
Click Update.
Note
The available credit must be entered in the currency selected for the customer.
The available credit must be entered in the currency selected for the customer.
Enter unpaid sales invoices
Setup Non-inventory item
If not already enabled, Enable the Settings for Non-inventory items
Add a Non-inventory item named Invoice Total
Click On New Non-inventory item
Enter Name - Invoice Total
Enter
When Sold
When PurchasedAccount - Sales
Account - Sales
If you click on Non-inventory items a listing appears with all your non-inventory items. In our example we only have one.
Entering unpaid invoices:
Enter a starting-balance invoice in a similar manner as a regular sales invoice. The Issue date field will, by default, be prefilled with the current date. Edit this to match the original issue date from your old accounting system.
Manager uses these pre-start sales invoices to establish starting balances in Accounts receivable. They will not affect profit and loss statements during the current or later financial periods. If an invoice has been partially paid on the day you begin using Manager, only its remaining balance due should be entered.
When finished, click Create to save the invoice. Repeat for all open sales invoices preceding your start date.
Create an invoice for each customer's unpaid invoices using the Non-inventory item Invoice Total with the assigned account Sales.
Notes:
- Include any taxes invoiced in the total amount and not as a separate amount entered - doing this allows you to enter the actual beginning balance for the Tax payable account. If you don't, you need to adjust your beginning balance for the Tax payable account.
Beginning Balance = Actual balance - taxes entered on invoices
- Use your actual invoice numbers, payment terms, and invoice dates - this allows you to refer to your old invoices and see the actual detail items that make up the invoice and run accurate unpaid invoices and aging reports
- Using this method you do not need to adjust your beginning inventory quantities
Example
In our simple example, we'll be entering two starting unpaid customer invoices assuming our start date is June 1 and our beginning unpaid invoices are dated in May.
The below Summary Balance Sheet includes the Accounts Receivable account with no balances entered.
Our first invoice is Invoice Number 100 in the amount of 250 for Customer1 dated May 15 and terms of Net.
Select the Sales Invoice Tab and enter a New Invoice
- Enter Customer1
- Enter Invoice Date of May 15
- Enter Terms of Net
- Select the Item and select the Non-inventory item Invoice Total
- The assigned Sales account Sales displays
- Enter the amount of 250
Select Create
The Summary Balance Sheet now displays an Accounts Receivable Balance of 250.
Our second invoice is Invoice Number 125 in the amount of 150 for Customer1 dated May 30 and terms of Net30.
Select the Sales Invoice Tab and enter a New Invoice
- Enter Customer1
- Enter Invoice Date of May 30
- Enter Terms of Net 30
- Select the Item and select the Non-inventory item Invoice Total
- The assigned Sales account Sales displays
- Enter the amount of 150
Select Create
The Summary Balance Sheet now displays an Accounts Receivable Balance of 400, the total of the two invoices entered.
If you click on the Sales Invoices tab, the sales invoice listing displays the invoices entered and the total amount of 400.
Continue to do this for all your customer unpaid invoices.