To prevent double entry, clearing accounts are used to perform the posting to.
It is therefore important that you set up a Clearing Account to avoid double posting to these accounts when transactions are passed through both the Cashbook and Accounts Receivable/Payable and posted to the General Ledger.
The Cashbook will credit/debit this Clearing Account when a receipt/payment is made and AR or AP will debit/credit it, instead of the bank account when you post transactions to the General Ledger.
This brings the net balance of the Clearing Accounts to zero.
The bank account code used in Bank Services must correspond to the Clearing Accounts set up in the Cashbook.
Look at an example using the following accounts for Accounts Receivable:
Cashbook Bank Account |
104 |
Cashbook Deposit - A/R Clearing |
201 |
Accounts Receivable Bank Account (A/R Clearing) |
201 |
Accounts Receivable Control - Trade |
200 |
Since both systems generate the same transactions, you must avoid a duplicate entry reaching the General Ledger.
To do this, you would change the bank account code in Accounts Receivable to the A/R Clearing Account (201).
The transactions would therefore be posted to the General Ledger from Cashbook and Accounts Receivable as follows:
Cashbook Bank Account (104) |
DEBIT |
|
Cashbook A/R Clearing Account (201) |
|
CREDIT |
Accounts Receivable Clearing Account (201) |
DEBIT |
|
Accounts Receivable Control - Trade (200) |
|
CREDIT |
The result is that the Clearing Account nets out to a zero balance, leaving the transaction balances in the General Ledger at the correct amounts.