Cash on Go Live Part 2: Clearing Imported Transactions

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A Normal Transaction Flow

In an everyday system, the transactions are pretty cut and dry.

• A purchase invoice is posted.

  • One side is the line item, which can be a Balance Sheet Account (such as an item or against an accrual) or Income Statement Expense

  • The other side is Accounts Payable (AP)

•   When paid, a check is cut, and a payment journal is posted

  • AP goes down

  • Cash goes down

• When you void – it follows one of the paths listed in Part 1 (i.e. it opens some sort of AP liability)

As we saw in part 1, the cash we imported is not a true cash document and would not follow these channels.

Reissuing an imported Outstanding “Check”

In this scenario, you cut a check for a vendor, but something happened to the check, and now you must re-issue it. Alternatively, the amount can sit on the vendor’s account to be used later. Since this is not in the check ledger entries and there’s no document attached, you won’t be able to void and un-apply. Reversing the imported check entry will only result in a net impact of $0 to the bank account.

To clear the vendor’s account:

1. In a general journal, Document Type select Invoice, select Account Type Vendor, select the vendor, and select the amount you are writing off to the vendor account. Then the balance account is the Bank Account and the Bal. Account No. is the account where the “check” is sitting. External Doc No will be required; if you know which invoices this applies to, you’d want to enter that here. The amount should be negative.

   • This will create a liability owed to the vendor, AP, and the AP sub-ledger

   • This will increase the cash in the bank

   • It will create a positive in the bank to offset the void on the bank recon

The journal entry to post the new document/cash item

Open Document on Vendor Ledger Entry

Bank Account Ledger Entry

2. You do NOT need to reverse/cancel/void the imported “check,” as this entry acts as that reversal.

3. Go into a Payment Journal, run Suggest Vendor Payments, and the line should appear. If it doesn’t, the Due Date may have been set terms from the posting date; you can force pull it in or adjust the due date in the vendor ledger entries.

The goal of this entry:

1. Create a document you can pay on

2. Reverse out the bank account cash (that does impact your GL, in my example we want the $500 to come back to our account so it can leave again)

3. Not hit any type of income statement or expense account for the rest of the entry / the balance was already brought over with yours BS/IS imports

Voiding an Imported Outstanding “Check” Without a Reissue of the Check or Purchase Document

In this scenario, you need to void the check that was imported, but a new check is not being issued, and instead, the amount is being sent to unclaimed funds.

1. In a general journal, select Account Type G/L Account, and select the Unclaimed Funds G/L Account (a liability) if unclaimed. Then Balance Account is Bank Account, and the Bal. Account No. is the account where the “check” is sitting. The amount should be negative.

2. The amount in the bank account will be positive, increasing your cash, which will be offset during the recon.

3. You do NOT need to reverse/cancel/void the imported “check,” as this entry acts as that reversal.

4. Submit the amount to unclaimed funds for that state. Once submitted to the state, pay the state, and the offset side is the unclaimed funds account. 

Unclaimed Funds G/L Entry

Goals of this entry:

1. We’re not creating an open document, we’re leaving a liability to consume later (use the liability account GL on a purchase invoice when remitted to the state)

2. We’re not impacting the Income Statement

3. The cash will go back into our General Ledger and Cash Subledger like we saw before, and consumed again when issued to the state