Background

The purpose of the AccountEdge Historical Sales and Purchases feature is to:

• Enter outstanding balances for vendors and customers (on their respective AccountEdge contact cards)
• Set the Accounts Payable account
• Set the Accounts Receivable account
• Adjust Equity accounts

Outstanding Balances

Historical Transactions are used to indicate open customer and vendor balances as of the Conversion Date of the AccountEdge company file. When you create Historical Transactions you are creating open transactions in the Sales and Purchases registers, and entering balances on customer (Sales) and vendor (Purchases) contact cards, for tracking and reporting. Balances can be positive or negative. If you create a negative Historical Sales entry, it will be a customer credit. If you create a negative Historical Purchases entry, it will be a debit for you.

The Historical Transactions do not post revenue or expenses to revenue (income) or expense accounts, nor do they post to Accounts Receivable or Accounts Payable accounts. Since Historical Transactions do not post to chart of account accounts, you will need to set the Accounts Receivable and Accounts Payable accounts with opening balances that equal the sum of the Historical Transactions. Additionally, if the Historical Transactions represent transactions in the current Fiscal Year, you will need to post opening balances in the appropriate Income, Expense and Cost of Sales accounts.

Creating Historical Transactions

Historical Transactions are entered, updated and deleted in the Historical Transactions windows. There is one for Sales (Setup > Easy Setup Assistant > Sales > Historical Transactions), and one for Purchases (Setup > Easy Setup Assistant > Purchases > Historical Transactions).

Setting Account Balances

In addition to a list of Historical Transactions, the (Sales and Purchases) Historical Transactions windows display the

• Total value of the Historical Transactions
• Total value of the Linked Account (Accounts Receivable for Sales, Accounts Payable for Purchases)
• The difference between the above two totals

When you are finished entering the Historical Transactions, you will need to enter the total value of the Historical Transactions into the Accounts Receivable account for Sales, and the Accounts Payable for Purchases. To identify the Accounts Receivable account, look in Setup > Linked Accounts > Sales Linked Accounts, and look for the Asset Account for Tracking Receivables. To identify the Accounts Payable account, look in Setup > Linked Accounts > Purchases Linked Accounts, and look for the Liability Account for Tracking Payables.

Use the Account Opening Balances feature to set the opening balances. Select Setup > Balances > Account Opening Balances. Set the balance amount in the Opening Balance column for the Accounts Receivable and Accounts Payable accounts. When you use this feature, AccountEdge will automatically set the Equity Historical Balancing account (3-9999) with the value you indicate as the opening balance.

If the Historical Transactions represent transactions in the current Fiscal Year, you will need to set the Opening Balances for the appropriate Income, Expense and Cost of Sales accounts, as well. When you set these balances, AccountEdge will remove the total value of these accounts from the Historical Balancing account, and post the value to the Current Year Earnings account. As a result, if all the Historical Transactions represent current Fiscal Year transactions, the Historical Balancing account will be zero, and the Current Year Earnings account will have the value of the Accounts Receivable account less the Accounts Payable account.

If the Historical Transactions represent transactions from a prior Fiscal Year you will, at your accounting professional's direction, need to make a Journal Entry (Command Centers > Accounts > Record Journal Entry) moving the value in the Historical Balancing account to the Retained Earnings account, or the account indicated by your accounting professional. Again, the result will be a zero value in the Historical Balancing account, and a value in the Retained Earnings (or other designated) account representing a prior Fiscal Year value.

There may be cases where Historical Transactions represent some current year transactions and some prior year transactions. In these cases, both of the above steps will apply.

Multi-currency Transactions

If you are working with international customers and vendors using the AccountEdge Multi-currency feature, you can enter outstanding, historical balances for these customers as well.

When the Multi-currency feature is enabled in AccountEdge, the Historical Transactions windows will include a Currency field. To enter Historical Transactions for an international customer or vendor, select the appropriate currency, and enter the transaction as you would for a customer or vendor in your local currency. Historical Transactions for international customers and vendors are entered in their currency, so card file entries will have to exist, indicating the currency.

For international Historical Transactions, the opening balances of the Accounts Receivable and Accounts Payable accounts associated with the foreign currency need be to be set with the total value of the Historical Transactions in the currency. You can identify these accounts by checking the Receivable Accounts and Payable Accounts tabs in the Currency Information window (Lists > Currencies, then selecting the appropriate currency). The opening balances can be entered as indicated above.

When you enter international Historical Transactions, AccountEdge will create a transaction journal entry. This happens by default because AccountEdge calculates the exchange value of the transaction. The journal entry AccountEdge creates will both debit and credit the same accounts, thus the net effect will be a zero amount posted to the accounts.

When you have entered the Historical Transactions, you will need to set the account Opening Balances as detailed above.

For additional information on the multi-currency feature, check the International Transactions FAQ.

Entry Order

A possible order to enter the historical transactions and set the account opening balances could be

1. Enter prior Fiscal Year Historical Transactions
2. Set the Opening Balances for A/R and A/P accounts that correspond to the prior Fiscal Year Historical Transactions (there are no P&L account balances to set; they must not be set)
3. Record a Journal Entry moving Historical Balance (3-9999) (debit) to Retained Earnings (credit) (or other Equity account that represents earnings from prior Fiscal Years, at the direction of your accounting professional)
4. Enter current Fiscal Year Historical Transactions
5. Update A/R and A/P accounts with the current Fiscal Year Historical Transaction balances
6. Enter the same current Fiscal Year balances in the P&L accounts
7. If a balance remains in Historical Balance account, the the current Fiscal Year balances used to update the A/R and A/P accounts do not match the P&L opening balances