Creditor balance

[mehtab]

Hi
We run SAGE 50 for our company.

When we run the AGed creditors report - the figure appears to be quite high. VAT is as per cash accounting. We have allocated bank payments to suppliers against invoices. the outstanding creditor appears to be older than 3 months. we have not reconcilied our bak account and vat returns for about two years - is this the reason for high creditor balances?

[brucedenney]

Sounds like you do not have good control of the accounts.

If you have not done Bank and VAT reconciliations then it could all be errors that no one has found/sorted.

I can think of no reason why anyone would not do VAT reconciliations, without having done them, there is a huge risk of items not having been included on the VAT return, this will either be VAT fraud or missed expense, in either case V expensive for you. I would get the VAT returns for the last X years and check them off, you might have to do an adjustment to the next one to account for any accumulated errors over the years.

Aged creditors is a small worry compared to these issues, I would rather be facing bankruptcy for not paying bills than prison for VAT fraud.

The Total Aged Creditors figure should be the same as the value of Creditors Control Account. You can visually check these in the bottom right of the aged creditors on screen report (same goes for aged creditors)
If you have not matched credits against debits, Purchase Invoices against Payment then these would be outstanding and leave balances, but these should balance each other out to some extent.

I would start getting things in order, do the Vat and Bank Reconciliations, keep on top of the accounts, don't have the accounts on top of you..