In a sales control account, the total of outstanding invoices at the beginning of the period and invoices raised during the period, less payments received for invoiced income, will give a balancing figure of invoices still outstanding at the end of the period – your debtors. You can then compare this figure with that of invoices outstanding and thereby detect any errors.

The control account

Debit £ Credit £
Debtors at beginning of period (Outstanding invoices at beginning of period equal to closing balances for previous period) 6589.36
Total invoices in period (Total of sales day book – your list of invoices – gross figure 13848.25
Total receipts in period (Total from cash book of invoiced income) 11250.57
Debtors at end of period (Balancing figures, which should agree with prepared list) 9187.04
20437.61 20437.61

If your debtors list does not agree with the control account, check the following points:

  • Have you listed all your debtors, including invoices only partly paid or outstanding from the beginning of the period, and invoices paid directly after the end of the period, because these receipts would not be in the cash book?
  • Are there any invoices you will never receive payment for – bad debts – that you have not included in your debtors figure? These should be entered as a separate credit in your control account.
  • Credit notes – does your total of invoices in the period include credit notes issued? If not, these must be included on the credit side of the account.
    Receipts from cash book should be only those that relate to invoiced sales or work done, not for the sale of a vehicle, loans, refunds etc. If included, these figures should be taken off the receipts figure in the control account.
  • Un-invoiced sales – sales that should have had an invoice raised but by error did not -should be added to the invoice total.
  • Receipts for sales that were not entered into the cash book will have to be included as a receipt on the control account.
  • Addition errors of receipts, invoices or debtors totals, or duplication of invoices, receipts, or debtors in listings.

The amended sales control might look as follows:

£ Debit £ Credit £
Debtors at beginning of period 6,589.36
Total invoices 13,848.25
Sales not invoiced in error 521.20 14,369.45
Credit notes 210.40
Total receipts 11,250.57
Sales of vehicle -3,200.00
Addition error -29.06 8021.51
Receipts banked in private account 2100
Bad debts 86
Debtors at end of period 10540.9
20958.81 20958.81
Original debtors figure per list 8064.23
Debtor paid after period not on list 2526
Debtor included twice -80
Invoice paid short, amount still outstanding 30.67
Reconciled debtors as above 10540.9

Do call us if you would like any further help or advice in this area.

 

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Disclaimer: The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.
Lambert Chapman Chartered Accountants

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