This article will go through the GL Type and accounting method for payments and deposits for all dealers/customers who joined Blackpurl post May 2024
Customer Deposits GL
This GL would typically be a Liability GL
The only entries that would hit this GL account would be entries recorded in the deposits section of Customer Orders
This GL account credits when deposits are added to a CO and debits whenever they are refunded or used in checkout. The offset GL for deposit or deposit refund entries will be to the Cash Reconciliation Clearing GL. But when a deposit is used in checkout the offset GL will instead be the Checkout Clearing GL
The balance of this GL account will reflect the current balance of deposits on Customer Orders
Here are some sample journal entries related to this GL account:
This is truely a clearing account and no manual entries should be made directly to this account in your accounting package.
Checkout Clearing GL
This is GL account will typically be set up as a Current Asset account type in Xero and as Other Current Asset Account type and detail type in QBO
The only entries that would hit this GL account would be entries recorded in checkout. The GL debits when payments are recorded in checkout or deposits are used in checkout and credits when refunds are recorded in checkout
With the exception of deposits used in check out, the offsetting entries will be to the Cash Reconciliation Clearing GL
The balance of this GL account at the end of any day will be zero unless for some reason a payment is added in checkout without the user finalizing the checkout
Here are some sample journal entries related to this GL account:
This is truely a clearing account and no manual entries should be made directly to this account in your accounting package.
Cash Reconciliation Clearing GL
This GL account is typically set up as a Current Asset account type in Xero and as Other Current Asset Account type and detail type in QBO
This GL account is used as the offset GL account for all entries posted to Customer Deposits GL and the Checkout Clearing GL.
This is demonstrated in the examples above for the Customer Deposits and Checkout Clearing GL’s
Entries will be cleared out of this account by journal entries generated from the Cash Reconciliation tool upon completing your daily balance.
Here is an example of the journal entry from Cash Reconciliation tool where there was a mixture of payments received for various payment methods and there was a variance between the actual values and what was processed through BP:
As you can see all of the cash/credit payment methods are summarized in the Undeposited Funds GL for the total actual amounts entered in the cash reconciliation tool. The Cash Reconciliation Clearing GL is cleared out for the total amount of all payments recorded in BP. The over/short value from the reconciliation tool will be posted to its own GL account
The memo descriptions shown above are only rough examples. We will ensure that each accurately reflects the source of the entry.
The balance of this GL account will reflect the total payments and CO deposits for those days where the Cash Reconciliation has not been closed and finalized
This is truely a clearing account and no manual entries should be made directly to this account in your accounting package.
Undeposited Funds / Payments Awaiting deposits GL
This GL account is typically set up as a Current Asset account type in Xero and as Other Current Asset Type and Undeposited funds Detail Account type in QBO (NB* Only 1 Undepsited funds account type is allowed in QBO)
As you can see above from the flow of entries through the other accounts and with the Cash Reconciliation tool being the only way entries are made into the Undeposited Funds GL, this keeps the entries found in this GL clean and easier to reconcile with entries from the bank account as seen in this example for one particular day:
Cash Reconciliation Tool Journals
The Cash Reconciliation tool will post a journal entry to your accounting package as part of the “Reconcile day” action. The purpose of this journal entry is to clear the day's entries out of the Cash Reconciliation Clearing GL and post one or more entries to the Undeposited Funds GL
This journal entry will contain a minimum of two line items but could include a number of line items depending on the payment/deposit activity for the day
Some of the values will use the actual values processed in Blackpurl while others will use the “Actual values” entered by the user in the reconciliation tool
Summarized line items and Cash over/short:
For each cash/credit payment method which has an “Actual Value” entered for the day, a line item will be included that will record the “Actual values” entered by the user in the reconciliation tool. Any amount in Cash over/short will also be included as a line item
Using the reconciliation below as an example:
The following line items would be included in the journal entry:
Cash Reconciliation Clearing line item:
The final line item in the cash reconciliation journal entry will offset the Cash Reconciliation Clearing GL for all payments received in Blackpurl for the date reconciled as seen in this example:
As cash reconciliation tool is posting journal entries when a date is reconciled and closed, we will also accommodate a scenario where the user may need to reopen a reconciliation so they can make corrections to it.
For this we have a “re-open” action similar to the one we have for CO invoices, VO’s and VR’s
As part of this reopen process we’ll first check to ensure that the original cash reconciliation journal entry is still intact in the accounting package and that none of the line items within it have been reconciled by the accounting package
Doing this will allow us to know if the cash reconciliation journal entry can be safely removed from the accounting package