ABM Sales & Purchase ledger part 2
The other side of the Sales and Purchase ledgers
In our last article “Basics of the ABM Sales & Purchase ledger” we went over the how to use Advanced business manager(ABM) to generate a Sales/Purchase order, a Delivery note, and an Invoice, through it’s Sales & Purchase ledger core modules. These three could be considered the most fundamental processes involved in the usage of an Accounting system such as ABM so, just as it is important to be able to conduct these three transactions, this article will cover how to reverse or remove them.
Credits, Returns, and removing Orders
More than meets the eye
Good management of your accounting system itself can play a major role is ensuring smooth and efficient management of your business, because even if a tool is intended to serve a positive purpose, bad use of said tool can be a detriment to your cause. ABM is the same. By being aware of how “input” processes(orders, deliveries, invoices) and their opposites(returns, credits) within the system interact and depend on each other, you can minimize the chances of error caused by incompleteness so that future tracking, or reporting of transactions are accurate.
Removing a Sales/Purchase Order
The actual execution of deleting an old sales/purchase order is not difficult at all – See Fig.1 on the left for visual guidance – however it does come with a pre-requisite which states that only orders that have no outstanding transactions linked to it(Fig.2) can be removed. To elaborate, this can mean either all derived transactions are completed – wherein it will be automatically cleared off the record anyways once it has been delivered and it’s invoice paid – or, there are currently no further transactions made against that order. In other words; it must be “all or nothing”.
If an attempt is made to delete an order which does not fall in either category, ABM will flag up a two stage warning and also deny the attempt(Fig.3).
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Returning a Delivery
Since we have already covered the “all” option by explaining how to complete deliveries and invoices in the previous article, we now need to cover how to reverse transactions. Starting with Returns.
First, navigate to the records list ‘Deliveries & returns’ under either Customers or Suppliers and double click on the delivery that needs to be returned. This brings up a window showing the details of that transaction(Fig.4), and from there select the ‘Return’ action(shown in a red outline). After, a new box will be shown with the standard transactions editing layout, and opening into the ‘header’ section(Fig.5).
In the ‘header’ section enter a ‘Return Number’ into the field on the right, as well as filling in and checking out the other fields, then proceed to ‘Product Item’.
Moving on to the ‘Product Item’ tab(Fig.6), as with every other time this section is brought up the objective is quantifying the products; in this case, which ones are being returned and how many. This means matching the number returned to the number ordered, and selecting the correct serial numbers for the items to be returned if one was initially used.
To submit the Return, select ‘Save & Close’ at the top. Following that you may be asked about wanting to put the returned items onto a back order, and then your return will be saved into the same main records list as deliveries.
Relationship with invoices
- Returns can be made regardless of whether a delivery has been invoiced or not.
- If a delivery has been invoiced, a return can be made independent of whether the invoice has or hasn’t been paid.
Crediting an invoice
To credit an invoice, you go to ‘Invoices & Credits’, open your target invoice, and select the ‘Credit’ button(Fig.6). Doing that will immediately present you with two windows: first confirming whether you wish to continue, and then asking if you wish to credit all or some items. Going past those will open the standard interface that all transactions use.
Enter a ‘Credit Number’ to be allowed to proceed to the other sections.
As per usual, verify the contents of the credit(Fig.7).
The refunds section is for quick transfer of money back to a customer. Follows the same format as the Deposit and Payment sections seen during Sales/Purchase Orders.
Select ‘Save & Close’ to finalise the Credit note.
After a credit has been logged, the money that was transferred in the initial invoice must be reversed. The best way to do this is to use the Receipts/Payments function within the ABM Cashbook module. The cashbook handles and keeps track of the movement of money within your business. Records can be viewed ‘all'(top level), Receipts Only’, or ‘Payments Only’.
A Purchase Credit will require a Supplier refund, accessible by selecting ‘Receipts’ from the top bar(Fig.8). From the ensuing window(Fig.9), select the Supplier Refund tab(1) and fill out the necessary information. For example: supplier code(2), amount paid(3), as well as the transaction it applies to(4),
‘Save & Close’ To finish.
Similarly, a Sales Credit must be followed up with a Customer Refund, which is found within the ‘Payments’ function next to ‘Receipts’.(Fig.8)
Using the same procedure as before, click over to the ‘Customer Refund’ tab(1) and make sure to choose a Customer Code(2), select the transaction the refund is aimed at(3), as well as everything else. (Fig.10)
Irregular Transactions and Stock control
Advanced Business Manager is able to account for most business models, practices, and selling habits due to the flexibility of its Stock Control features which allow users to do things out of the norm such as enter quantity values of less than zero, and non-whole numbers, but still successfully process the transaction. Two examples of this would include:
- Making a delivery for minus one of a product, which would simulate a Return.
- Needing to sell only part of a product that was previously bought in.
These could be considered instances of bad, incorrect Stock Control however there may be times where orders containing situations like those outlined above cannot be avoided, or strict adherence to proper procedure is not wholly necessary. Regardless, such events do not actually have true repercussions for a business other than potentially causing some confusion in cases of records evaluation, reporting, documentation and the like.
On the other hand, incorrect procedures like those mentioned will mean the order records cannot be deleted because from perspective of the ABM system, those orders are not recognised as fully complete. The preventative solution to this is of course, to exercise proper procedure – such as utilising the Stock Units feature to handle items that might be sold in parts – however, to otherwise overcome the issue entails artificially creating balance between order, delivery, and invoice, outside of what may have occurred in the original transaction.
Viewing the status of the aforementioned balance can be done by going into the main Sales/Purchase Orders record list and double-clicking the transaction of interest.
Look to the right side of the details window and check if the ‘Show All Quantities’ tick-box is activated. If it isn’t, enable it. In the spreadsheet portion of the window where the products featured in the transaction are listed, there should be three columns labeled ‘Invoice’, ‘Delivered’, and ‘Ordered’ with numbers under them showing their value for each product; these are the ones that need to be equal across the board.
In the case where a decimal number of a product has been invoiced that is lower than what was delivered/ordered(Fig.11 for example), the remedy is to return an amount equaling the difference; which would bring down the other two to match the invoice.
If the amount sold is less than what was ordered(Fig.12), simply deliver and invoice the rest of the product.
Finally, in a situation where a negative value delivery has been made(Fig.13), then file a return of the same values to raise the quantities up to zero. In this example(Fig.13) that would be a return for -4 of the product.