Overview
Unallocated Payments and Receipts will appear on a cashflow report when the program is unable to identify a ledger payment or receipt against an item (or group of items). The overall total cashflow in and out of the business will still be correct, but the allocation within the business is not complete.
There are a number of reasons for this but it usually occurs when an invoice has been cleared by an 'on account' payment. For example, if you enter the ledger payment prior to entering the invoice, or if you are making a number of smaller 'on account' payments to clear one large invoice.
All other sections of the accounts will be correct - for example the profit & loss, balance sheet and trial balance will show the figures posted to the correct heading code and the supplier/ customer ledger balance reflects their true value.
To investigate the figures
Print the report 'Unallocated Payments or Receipts' in the Cashflow section of the Report Library to investigate the figures.
If necessary you may also need to look at the detailed ledger card of the suppliers or customers.
Check through the list of transactions on the Unallocated Report to find any that counteract each other. For example, cancelled supplier cheques or customer receipts. These may be ignored.
In order to reallocate the figures to the correct section of the cashflow use one of the following methods
If the invoice has subsequently been posted against the same supplier (or customer) as the unallocated ledger payment (or receipt), the simplest solution is to edit the original supplier cheque or customer receipt and use it to clear the invoice now.
- Use the Daybook and Transaction listing to locate the original ledger payment (or receipt).N.B. If it has been reconciled through the bank, you may need to temporarily unreconcile it.
- On opening the original ledger payment, you will see that the invoice is now listed and can be ticked as paid off.
- The unallocated payment or receipt will be removed from the cashflow and reallocated under the correct heading codes.
If the invoices entered do not exactly agree with the payments made, you may still edit each ledger payment or receipt and clear as many of the items on each invoice as possible.
- Go into the Customer / Supplier Ledger or the Daybook to find the original ledger payment.
- Tick off as many invoices as the payment total will allow(you may have to go into more than one ledger payment for each customer or supplier).
- As each item is ticked off they will be allocated to the correct heading code on the cashflow. Any differences between the ledger payment/receipt and the items paid (whether plus or minus) will be shown 'on account'.
- Use this 'on account' figure to clear subsequent items. Each cheque or receipt will still appear on the unallocated payments/receipts audit but only the net change to the 'on account' value will affect the unallocated section of the cashflow. Over time these fluctuations will net themselves off.
If many small payments have been made towards one large invoice, and an 'On-account' figure has built up on the ledger, you will need to 'Clear' the ledger and use the 'Cashflow Journals' to reallocate the money from 'unallocated' to the correct heading code. This will only update the cashflow report and will not affect any other existing figures.
- Go into Ledger Payments (or Receipts) and find the supplier / customer with the unallocated transaction and 'On-account' figure. The un-cleared invoice will be listed and an 'On-account' figure will show in the box at the bottom of the grid.
- Before clicking any other buttons, click 'Clear' at the bottom of the window.
- A similar grid to the ledger screen will appear. Tick off the invoices until the 'On-account' figure is used up.
- Save
Then,
- Open a Cashflow Journal
- Enter the date that you wish to affect the cashflow.
- On the first item of the cashflow journal select the heading band 'Other'. This will allow you access to the 'Unallocated Payments' or 'Unallocated Receipts' under the heading code box. Enter the correct amount and then click on decrease (or credit for payments and debit for receipts).
- On the next item, to transfer the money from 'unallocated' to the appropriate heading code, you should increase the appropriate heading codes.
For more help on Farm Business Manager call our Adviceline team on 01594 545022 or email us at support@farmplan.co.uk.
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