The most common reason is that the datafile is never set correctly in the first place. Let us assume you started your business on 01 Apr 2009. Initially you recorded your business transactions using Excel spreadsheets. On 01 Oct 2009 you decided to use MYOB. In order to move forward from your Excel based accounts you must enter the closing balances as on 30 Sep 09 into MYOB as the opening balances.
Let us further assume that your debtors ( customers) owed you the following amount:
- ABC Ltd $150
- General Trading Ltd $200
It means the total amount owed from customers is $350.
These must be entered as opening balances. Please look at the steps given below to enter that:
Step 1 Enter the total amount owed from customers in the Trade Debtors Account. To do that go to Setup=> Balances=>Account Opening Balances
Step 2 Enter $350 in the Trade Debtors account as shown.
Step 3 Now you need to enter the value of individual sales. To do that go to Setup=>Balances=>Customer Balances
Step 4 Select the customer
Step 5 Click on Add Sale
Step 6 Enter the details of the sale.
Step 7 Once you have entered all the sale you should get this message( if everything is all correct)
Many MYOB users find that the total amount due from their customers ( debtors) sometimes does not match with the amount shown in the debtors account in the chart of accounts. This is what your accountant would call as imbalanced debtors and they would spend considerable time balancing that. It is imperative that it balances when the annual set of accounts are prepared.
How do I know if my debtors are balanced
The simplest way is to run the Receivables Reconciliation Report. Look at the sample report below. The imbalance is generally shown at the bottom.
What are the possible reasons
There are several reasons but the most common are:
- No opening balances entered when starting to use MYOB file
- Making direct entries usually General Journal entries into the Debtors accounts
- Applying payments to sales before the date of the sale( looks strange but very common)
- Using Receive Money to record customer payments rather than Receive Payments
What do I do?
The best thing to do at this stage is to run the Receivables Reconciliation Report and see if it is imbalanced. We will be running a series of blogs over the next two months and will reveal all that you can do to set it right and prevent that from happening in the future.
