Transactions in FirstOffice - Sales Invoices
Invoices are demands for payment sent to Customers. The raising of an Invoice causes a Nominal Ledger Transaction to be created which debits the Debtor Account (which keeps a tally of how much your company is owed), credits a Sales Account (it is normal practice to maintain more than one Sales Account to keep a record of the sales of different types of product) and, in most cases, credits a VAT Account. Once Invoices have been raised in the Sales Ledger, the creation of the Nominal Ledger Transaction is handled automatically in FirstOffice. Below is shown a typical such Transaction.
FirstOffice has a number of methods whereby the Accounts used in this Transaction can be chosen in such a way as to reflect the accounting needs of different situations. Different Sales Accounts can be used for individual Items, and the VAT Account can be controlled through the VAT Code. The number of options is great, and they are described in detail in this section.
Each individual Invoice, when approved, determines how the consequent Nominal Ledger Transaction is to be structured. The Accounts used are chosen as follows:
Sales Account
The Sales Accounts in the Nominal Ledger are used to record the levels of sales of different types of Items. Different Invoice rows can have different Sales Accounts.
For each row on an Invoice, the Sales Account is chosen as follows:
- When you enter an Item Code, if there is a Price List applying to the Invoice and there is a record in the Prices setting for that Item/Price List combination, FirstOffice takes the Sales Account from there. If this Sales Account is blank, or there is no appropriate record in the Prices setting:
- FirstOffice uses the Sales Account for the relevant Item (taken from the Item register). If this is blank:
- FirstOffice uses the Sales Account entered in the Account Usage S/L setting for the zone to which the Customer belongs. There are three zones (Domestic, EU and Export), and each can have a different Sales Account.
If the selected Account is missing from the Chart of Accounts, FirstOffice will display the error message: "Sales Account missing, check Account Usage S/L".
VAT Account
When you enter an Invoice, you must specify a VAT Code in each row. This code refers to a specific VAT Code record, which will determine the Output VAT Account in the subsequent Nominal Ledger Transaction and the rate at which VAT will be charged. VAT Code records are set up using the VAT Codes setting.
When you enter Invoice rows, you cannot leave the VAT Code field (marked 'V-Cd') blank. FirstOffice places a default in the field, chosen as follows:
- When you enter an Item Code, FirstOffice uses the VAT Code entered for the relevant Item in the Item register. If this is blank, or if no Item Code has been entered to the Invoice row:
- FirstOffice uses the VAT Code entered in the Account Usage S/L setting for the zone to which the Customer belongs.
If the selected VAT Code is missing from the
VAT Codes setting, FirstOffice will display the error message: "Code not registered".
Debtor Control Account
When a Nominal Ledger Transaction is generated from an Invoice, the Debtor Account is not determined from the Invoice itself (unlike the Sales and VAT Accounts described above). Instead, it is determined using the Debtor (or, if the Invoice is a cash Invoice, the Cash) Account entered in the Account Usage S/L setting.
If the selected Account is missing from the Chart of Accounts, FirstOffice will display the error message: "Debtor Account missing, check Account Usage S/L".
