Skip to main content

Notifications

Microsoft Dynamics GP (Archived)

How do I apply a check directly to an expense account?

Posted on by 85

Greetings!

I'm very new to Dynamics GP (about a month) and this is first posting on this forum.  I suspect that what I'm asking is basic, but I haven't come across the answer in my searches, likely because I'm not using the right terminology.

Occasionally I get checks that don't apply to a customer invoice, such as a rebate check for recycling our paper.  For these situations, I've created a customer account called Miscellaneous that I use for entering the check.  I then use the distribution window to credit our account for garbage disposal expense.  The transaction appears to have entered the GL when I examine a trial balance, but when I print a trial balance of the Miscellaneous account from the sales module, I also see the amount of the check appear as a credit on the account.  I'm really struggling with how the credit can be in both places at once.

Similarly, sometimes customers will pay two of our related companies on the same check.  In this case, I'll use the distribution window to park a credit in a suspense account until a bank transfer is made to transfer the funds to the related company.  When this happens, a bank transaction is used to debit suspense and credit cash.  Unfortunately, I still see the credit on the Miscellaneous customer account.  I would really appeciate if anyone can explain what is happening or whether there's a much better way to accomplish the tasks I've described.  Thanks in advance.

Brian S.

*This post is locked for comments

  • Brian S. Profile Picture
    Brian S. 85 on at
    RE: How do I apply a check directly to an expense account?

    Frank, Leslie, Victoria,

    Thank you so much for answering to my question.  With your help, I think we have a solution that will work for our accounting team.

    I learned a lot by trying each of the suggestions you made and here’s what I found:

    • Using Bank Transaction Entry as Frank suggested is simple and it doesn’t affect the AR trial balance, however the check entered this way doesn’t show up in the Bank Deposits Entry window.  I need this because all the checks (whether from customers or rebates) will be part of the same deposit taken to the bank on that day.  This method will work well should we receive funds by some other method than check.

    • Using the Payables Transaction Entry works very nicely and allows the check to be included with the other checks that are going to the bank on the given day.

    • The method described by Victoria to facilitate intercompany transfers is exactly what we were looking for.  Additionally, a slight variation on step 1 of this method provides a great solution to my first question.  

    o With the Receivables Transaction Entry window open and Debit Notes selected, a dollar amount can be entered into the Check field.  

    o When this is done, the debit is routed to Cash instead of AR

    o Using the Distribution, select the appropriate expense account for the credit

    • I like this because it’s conceptually similar to the procedure we were using with our previous accounting software.

    I’m hoping one more thing can be clarified.  I still show credit balances on the Miscellaneous AR account (from previous entries), and the GL shows that the appropriate expense account or suspense account was credited.  What’s happening here since the credit can’t be to two accounts simultaneously?  How can this be cleaned up?

  • Verified answer
    Victoria Yudin Profile Picture
    Victoria Yudin 22,766 on at
    RE: How do I apply a check directly to an expense account?

    Both approaches (Payables Return and Bank Transaction Receipt) are great options for the first question.

    But Leslie, next time same yourself some typing and just link here: victoriayudin.com/.../payables-return-transactions-in-dynamics-gp  :-)

    For the second question - customers will pay two of our related companies on the same check, I am assuming these are 2 different companies in GP? If so, here is one way to handle it:

    For the sake of having an example, let's say that in Company A customer owes $400 and in Company B they owe $600. They send one check for $1000 to Company A.

    1. Enter Debit Memo for the customer in Company A for $600. Debit will be AR, credit will be "Due to/from Company B". Post.

    2. Enter Cash Receipt for the customer in Company A for $1000. Apply it to the original $400 invoice and the debit memo created in step 1. Post cash receipt and enter/post bank deposit.

    3. Enter Credit Memo for customer in Company B for $600. Debit will "Due to/from Company A", Credit will be AR. Apply the credit memo to the customer invoice for $600. Post.

    Done. Both the invoices are now fully paid in both companies. Cash is recorded where it was deposited and you have a Due to/from balance from Company A to Company B for the $600. If you end up transferring Cash from Company A to Company B, then:

    4. Enter Bank Transaction (Withdrawal) in Company A for $600. Debit will be "Due to/from Company B", credit will be Cash. Post.

    5. Enter Bank Transaction (Receipt) in Company B for $600. Debit will be Cash, credit will be "Due to/from Company A". Post and enter/post bank deposit.

    Hope that helps.

  • Verified answer
    L Vail Profile Picture
    L Vail 65,271 on at
    RE: How do I apply a check directly to an expense account?

    Hi Brian,

    Frank gives you good advice! It’s straightforward and it works.

    I’m going to offer an alternative, just because I heard the word ‘Rebate’. When I hear rebate, I think vendor, not customer. This method will record the rebate received in your payables subledger, for the vendor from whom you received it. If you don’t care who you received it from, just create the Vendor ID ‘REBATE’ (or whatever you like).

    1.  Using the REBATE vendor, enter a transaction in the Payables Transaction Entry window using the document type of ‘Return’ instead of ‘Invoice’.

    2.  Enter a short description defining the rebate. Whatever you type here will become the reference to the Journal Entry on the GL.

    3.  Put the amount of the rebate in the ‘Returns’ field.

    4.  Put the amount of the rebate in the ‘Check’ field on the right-hand side of the window.

    5.  The Payables Check Entry window will open. Fill in the Payables Check Entry window with your Checkbook ID, and the vendor’s check number.

    6.  Check your distribution accounts.

    7.  Post the transaction.

    8.  Include the rebate in a deposit using Bank Deposit Entry.

    After you post the transaction, the rebate will show up as a receipt you need to deposit, just like your customer cash receipts.

    Using this method, you keep the rebates in the related subsidiary module, and can keep track of the entity that sent it to you if you wish.

    Kind regards,

    Leslie

  • Verified answer
    Frank Hamelly | MVP, MCP, CSA Profile Picture
    Frank Hamelly | MVP... 4,029 Super User 2024 Season 2 on at
    RE: How do I apply a check directly to an expense account?

    Welcome to the GP Forum Brian!

    When you have a Cash Receipt that is unrelated to a customer, use Bank Transaction Entry, Option = Enter Receipt (Financial>>Transactions>>Bank Transaction Entry). You'll be able to record the check without affecting the AR Trial Balance.

    For scenario two, are these related companies separate companies in GP?

Under review

Thank you for your reply! To ensure a great experience for everyone, your content is awaiting approval by our Community Managers. Please check back later.

Helpful resources

Quick Links

December Spotlight Star - Muhammad Affan

Congratulations to a top community star!

Top 10 leaders for November!

Congratulations to our November super stars!

Community AMA December 12th

Join us as we continue to demystify the Dynamics 365 Contact Center

Leaderboard

#1
André Arnaud de Calavon Profile Picture

André Arnaud de Cal... 291,240 Super User 2024 Season 2

#2
Martin Dráb Profile Picture

Martin Dráb 230,149 Most Valuable Professional

#3
nmaenpaa Profile Picture

nmaenpaa 101,156

Leaderboard

Featured topics

Product updates

Dynamics 365 release plans