Accounts receivable and payable (debtors and creditors) concepts

The accounts receivable (debtor) and accounts payable (creditor) accounts, account codes 1100 and 2100, are nominal accounts used to record debt - i.e. how much money customers owe to you, and how much money you owe to your vendors.

Money owed by customers is an asset - although you don't have the money yet, a debit balance on this account will convert to cash at a future date.

Money owed to vendors is a liability - although you haven't paid the money yet, a credit balance on this account will reduce your cash balance at a future date.

It's important to remember the following:

• Every entry to one of these accounts must be associated with a contact (either a customer or a vendor)
• Every entry to one of these accounts must have an invoice reference associated with it

Because entries to the 1100/2100 codes have to be associated with contacts, the only type of journals that should be posting to these codes are:

1100 Accounts Receivable (Debtors Control)	SI, SC, SR
2100 Accounts Payable (Creditors Control)	PI, PC, PP

How they work

These are the only times these codes will be posted to:

Action	Code	Journal type	Debit	Credit
Invoicing a sales order	1100	SI	X
Receiving money from a customer	1100	SR		X
Crediting a sales credit	1100	SC		X
Refunding money to a customer	1100	SR	X
Invoicing a purchase order	2100	PI		X
Paying money to a supplier	2100	PP	X
Crediting a purchase credit	2100	PC	X
Receiving a refund from a supplier	2100	PP		X

Note that SI, SC, PI and PC journals always post to the 1100 or 2100 code in the same way, while SR and PP journals can post either a debit or a credit to the codes, depending on whether money is entering or leaving your bank account.

Invoice references

Possibly one of the most important things to know is that Brightpearl uses invoice references to match invoices and payments.

This is why all entries to the 1100 and 2100 codes must have an invoice reference, even if the entry is not actually associated with an invoice. The invoice reference must be unique.

For example, consider an SR journal linked to an order which has not yet been invoiced. You’ll see something like this:

Account	Invoice ref	Order ID	Dr	Cr
1200 Bank		1001	X
1100 Accounts receivable	Accnt-1001	1001		X

Note the invoice reference against the accounts receivable row - it starts with ‘Accnt’, indicating a payment on account. When the order is invoiced, that invoice reference will update to the order’s invoice reference.

In order for an invoice to be cleared, the debits and credits posting to 1100/2100 with that invoice reference must match.

If they don’t match, the invoice or payment on account will be considered outstanding, and it will appear on the Accounts Receivable/Payable (Aged Debtors/Creditors) report.

Accounts Receivable/Payable (Aged Debtors/Creditors) reports

These reports can be accessed under the Customer or Vendor (Supplier) menus, or under the Reports menu. They display all outstanding balances.

You can filter the reports to display a ‘detailed’ report, which displays all the individual outstanding invoices (or credits or payments on account) making up the balances. This is really useful for troubleshooting because you can isolate which invoices specifically need to be investigated.

Here are some things to be aware of:

• For performance-related reasons, the report does not always display all results. If this is the case, you will see a warning at the top of the page. Please contact Support for assistance.
• Clicking into the balance will bring up the contact’s financial history filtered to Cleared: No. However the entries may actually be cleared (for example if you are looking at a backdated report) so that is not always reliable. If you need to find the journals making up a balance, filtering the financial history for just the invoice reference is the most reliable way.

Learn more about the accounts receivable report here, and the accounts payable report here.

FAQs

My accounts receivable/payable (aged debtors/creditors) report doesn’t match my trial balance/balance sheet.

Ensure you're filtering all reports up to the same date. The trial balance start date should be set to a time before you started using Brightpearl.

If it's not a date issue, check for any entries posting to accounts 1100/2100 not of type SI/SC/SR/PI/PC/PP.

A balance is coming up on the report, but when I go to allocate a payment nothing’s there.

It could be that the report is being backdated or a payment has been forward-dated. Check the dates of the report and of the relevant invoice.

A journal may have been incorrectly cleared. Try filtering the financial history for the invoice reference, without the cleared setting set to "No".

Alternatively, if the contact has invoices/credits/payments in foreign currencies the issue could be to do with an exchange rate on a journal.