Possible error while grouping the account ledger
1. Placing individual party accounts under Sales or Purchase Accounts groups:
Accounts of parties with whom your company has trade relationship must be opened under any of the following sections
Sales and Purchase account groups are meant for revenue accounts and would be reflected in the Profit & Loss Account. If you open party accounts under these groups, you will find it difficult to pass sales or purchase voucher transactions. For example, in a sales voucher transaction entry, first you must select the sundry debtor/sundry creditor from list. Moreover, other facilities like bill-wise allocation and tracking would not become available unless the accounts belong to one of these groups.
2. Opening two accounts of the same party
InventoryPlus has separately classified debtors, creditors only for convenience. There is no operational distinction except for the purpose of keeping the accounts of a particular group together during displays and analysis. Thus you can pass both sales and purchase entries for a party account placed under Sundry Debtors/Sundry Creditor in 'Accounts' screen by selecting Groups drop down. Created account will be available on Trader and Customer screen as well. If you want to update the address then update the details from customer or trader screen.
We recommend that you use the classification depending on the most natural group for the party. For example, parties from whom you buy more frequently than you sell to, could be placed under Suppliers, as that would be the natural place for you to look for his account.
InventoryPlus does not restrict the accounts from having obverse balances. Thus, a Sundry Debtor can have a credit balance depending on the state of his account.
You need not to open two accounts of the same party - one under Sundry Debtors and another under Sundry Creditors.
Remember, InventoryPlus restricts you from opening two identical ledger accounts. Of course, you may decide to circumvent by marking one account as "A & Co - S/Dr" and another "A & Co - S/Cr". Doing this would allow you to have two accounts of the same party under two groups, but you would lose the advantage of analyzing his net position in one place. We recommend that you maintain a single account to obtain best benefits.
3. Placing expenditure items under a Liabilities group, e.g., the expenditure item 'Rates & Taxes' under the group 'Duties and Taxes'.
The group Duties and Taxes is specifically meant to handle taxation liabilities of your company. Rates & Taxes and other statutory expenses should be placed under Indirect Expenses.