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Should all invoices/credit notes be entered in PL?

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We would like all invoices and credit notes received from suppliers to be entered into our Purchase Ledger.  However, our accounts disputes this when a credit note is received shortly after an invoice and they both net off and tends to avoid posting them to PL and just shreds both documents!

My argument would be both are legal documents and to keep an accurate audit trail both of them should be posted - if not just to be covered in case of any disputes raised by the supplier in the future.  

Am I right in this thinking or am I wasting accounts' time?


Replies (14)

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By lionofludesch
06th Jan 2022 16:07

You're right on both counts.

You should do it and it's a waste of time.

Thanks (5)
By HiddenAccountant
06th Jan 2022 17:29

I agree with your accounts team from a time saving view.

But as you say, posting both creates a history you can refer back to years down the line.

We post these and on a few occasions they have been handy when no one can remember things that happened 2 years ago.

Thanks (0)
By Truthsayer
06th Jan 2022 18:44

You're right. Accounts should know better than to do that.

Thanks (1)
By Jason Croke
07th Jan 2022 08:37

From an MTD perspective (which is mandatory from April for all VAT registered traders), you will need to comply with MTD rules which require you to have a digital entry for each sale/credit and purchase made. So if you aren't winning your argument, use MTD/VAT as the vehicle for being right.

Thanks (1)
Replying to Jason Croke:
By solomon30
07th Jan 2022 10:37

That’s a very good point I hadn’t realised. Thanks for reminding me

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By stepurhan
07th Jan 2022 08:44

If a glitch in a supplier's systems show an invoice as still owing, and you don't have the credit note recorded to show it was cleared, what are you going to do?

Thanks (1)
Replying to stepurhan:
By Tax Dragon
07th Jan 2022 09:22

.oO Shredding credit notes. It's genius.

Thanks (2)
Replying to stepurhan:
By solomon30
07th Jan 2022 10:36

My point, to them, exactly. Thank you :)

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By johnt27
07th Jan 2022 10:52

Your accounts team are morons - suggest they are fired for gross incompetence. Others have already made the rational arguments.

You can buy OCR tech for much less than the accounts team will be paid - Dext, Autoentry etc.

Thanks (2)
Replying to johnt27:
By Bobbo
07th Jan 2022 12:46

I think gross incompetence is a bit strong... though if they continue with the 'shred and not post to accounting system' method after OP has specifically instructed them not to, is that misconduct?? (IANAEL)

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By mushroom_dept
13th Jan 2022 10:27

I'm shocked that anyone in an accounts department would consider that shredding matching documents was a good idea.

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By North East Accountant
13th Jan 2022 10:48

100% yes.

Thanks (1)
By paulwakefield1
13th Jan 2022 13:15

Whilst not disagreeing with the responses, I did agree with a client the other day, at their request, just to file an "invoice" with a note and not to bother posting it and raising a dummy credit note.

Client made a part payment of a supplier invoice. Supplier then (for reasons not entirely clear) decided to raise an invoice for the part payment instead of treating it as a part payment*, admitted he didn't know what he was doing, hadn't posted it to his system, didn't want to raise a credit note (as his accountant would charge him for it!) and had torn up the invoice.

*there was no question of confusion. It was a one off supply and had been agreed to be paid in two instalments.

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By tom123
13th Jan 2022 14:14

A lot of work that we do in finance is of questionable use.
For example going to lots of effort to post prepayments and accruals, and then the same in reverse to try and produce a cash flow statement.

However - this is how the current laws and norms of the land are.

Once you have an organisation that actually has a finance department, then they really should not be doing this at all. If they have any qualifications I am shocked they even considered it.

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