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Credit notes received enter as negatives because they reduce the liability. Additional columns can hold a due date and a purchase order number. A general ledger code (",{"text":705,"type":137,"marks":706},"GL code",[707],{"type":192,"attrs":708},{"href":709,"uuid":25,"anchor":25,"target":195,"linktype":116},"https://www.spendesk.com/blog/gl-code/",{"text":711,"type":137},") column can hold the coding detail.",{"type":213,"attrs":713,"content":714},{"level":215,"textAlign":25},[715],{"text":716,"type":137},"How a purchase entry is recorded: a worked example",{"type":131,"attrs":718,"content":719},{"textAlign":25,"key":133},[720,722,728],{"text":721,"type":137},"A £1,200 supplier invoice at the UK standard VAT rate of ",{"text":723,"type":137,"marks":724},"20%",[725],{"type":192,"attrs":726},{"href":727,"uuid":25,"anchor":25,"target":195,"linktype":116},"https://www.gov.uk/vat-rates",{"text":729,"type":137}," breaks down as £1,000 net and £200 VAT. The invoice goes first into the purchase day book, which lists each credit purchase’s net and VAT figures alongside its gross amount. From there it is posted twice: once to the supplier account in the purchase ledger, and once, as part of the day-book total, to the general ledger. The four postings look like this:",{"type":332,"content":731},[732,758,784,809,834],{"type":335,"content":733},[734,742,750],{"type":338,"attrs":735,"content":736},{"colspan":340,"rowspan":340,"colwidth":25},[737],{"type":131,"attrs":738,"content":739},{"textAlign":25,"key":208},[740],{"text":741,"type":137},"Step",{"type":338,"attrs":743,"content":744},{"colspan":340,"rowspan":340,"colwidth":25},[745],{"type":131,"attrs":746,"content":747},{"textAlign":25,"key":227},[748],{"text":749,"type":137},"Debit",{"type":338,"attrs":751,"content":752},{"colspan":340,"rowspan":340,"colwidth":25},[753],{"type":131,"attrs":754,"content":755},{"textAlign":25,"key":235},[756],{"text":757,"type":137},"Credit",{"type":335,"content":759},[760,768,776],{"type":414,"attrs":761,"content":762},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[763],{"type":131,"attrs":764,"content":765},{"textAlign":25,"key":243},[766],{"text":767,"type":137},"Invoice to general ledger",{"type":414,"attrs":769,"content":770},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[771],{"type":131,"attrs":772,"content":773},{"textAlign":25,"key":251},[774],{"text":775,"type":137},"Purchases £1,000, VAT input tax £200",{"type":414,"attrs":777,"content":778},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[779],{"type":131,"attrs":780,"content":781},{"textAlign":25,"key":259},[782],{"text":783,"type":137},"Purchase ledger control £1,200",{"type":335,"content":785},[786,794,801],{"type":414,"attrs":787,"content":788},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[789],{"type":131,"attrs":790,"content":791},{"textAlign":25,"key":270},[792],{"text":793,"type":137},"Invoice to purchase ledger",{"type":414,"attrs":795,"content":796},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[797],{"type":131,"attrs":798,"content":799},{"textAlign":25,"key":276},[800],{"text":476,"type":137},{"type":414,"attrs":802,"content":803},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[804],{"type":131,"attrs":805,"content":806},{"textAlign":25,"key":294},[807],{"text":808,"type":137},"Northgate Print £1,200",{"type":335,"content":810},[811,819,826],{"type":414,"attrs":812,"content":813},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[814],{"type":131,"attrs":815,"content":816},{"textAlign":25,"key":302},[817],{"text":818,"type":137},"Payment to general ledger",{"type":414,"attrs":820,"content":821},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[822],{"type":131,"attrs":823,"content":824},{"textAlign":25,"key":308},[825],{"text":783,"type":137},{"type":414,"attrs":827,"content":828},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[829],{"type":131,"attrs":830,"content":831},{"textAlign":25,"key":327},[832],{"text":833,"type":137},"Bank £1,200",{"type":335,"content":835},[836,844,851],{"type":414,"attrs":837,"content":838},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[839],{"type":131,"attrs":840,"content":841},{"textAlign":25,"key":344},[842],{"text":843,"type":137},"Payment to purchase ledger",{"type":414,"attrs":845,"content":846},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[847],{"type":131,"attrs":848,"content":849},{"textAlign":25,"key":353},[850],{"text":808,"type":137},{"type":414,"attrs":852,"content":853},{"colspan":340,"rowspan":340,"colwidth":25,"backgroundColor":25},[854],{"type":131,"attrs":855,"content":856},{"textAlign":25,"key":362},[857],{"text":476,"type":137},{"type":220,"content":859},[860,867],{"type":223,"content":861},[862],{"type":131,"attrs":863,"content":864},{"textAlign":25,"key":371},[865],{"text":866,"type":137},"The business recognises the expense and the VAT when it posts the invoice, not when it pays it. That’s why the payment entry carries no VAT: AP pays £1,200 from the bank to clear the liability, having already recorded the input tax from the day book.",{"type":223,"content":868},[869],{"type":131,"attrs":870,"content":871},{"textAlign":25,"key":380},[872],{"text":873,"type":137},"The control account, also called the purchases ledger control account, carries a credit balance equal to the total owed to suppliers.",{"type":131,"attrs":875,"content":876},{"textAlign":25,"key":389},[877],{"text":878,"type":137},"Most control-account differences start in the day book. If someone adds up a day-book total wrongly, only the control account is affected, because supplier accounts were posted invoice by invoice. 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Accounts payable and purchase ledger (or bought ledger) name the same record, and the AAT’s careers guidance treats them as equivalent. The control account label on your chart of accounts shows which convention your system follows.",{"type":131,"attrs":1107,"content":1108},{"textAlign":25,"key":645},[1109],{"text":1110,"type":137},"As a function, AP covers “the recording and processing of financial transactions relating to procurement and suppliers” (ACCA): capture, matching, approval, and payment runs as well as the ledger. In a UK SME you’ll hear “the purchase ledger” for the record and “AP” for the team, and both are correct.",{"type":213,"attrs":1112,"content":1113},{"level":215,"textAlign":25},[1114],{"text":1115,"type":137},"From purchase order to payment run",{"type":131,"attrs":1117,"content":1118},{"textAlign":25,"key":654},[1119],{"text":1120,"type":137},"An invoice should reach the purchase ledger only once it has been matched to what was ordered and what arrived, and a typical sequence runs like this:",{"type":1122,"attrs":1123,"content":1125},"ordered_list",{"order":340,"key":1124},"ol-0",[1126,1141,1148,1155,1162,1169],{"type":223,"content":1127},[1128],{"type":131,"attrs":1129,"content":1130},{"textAlign":25,"key":662},[1131,1133,1139],{"text":1132,"type":137},"Raise a purchase request and, once approved, issue the ",{"text":1134,"type":137,"marks":1135},"purchase order (PO)",[1136],{"type":192,"attrs":1137},{"href":1138,"uuid":25,"anchor":25,"target":195,"linktype":116},"https://www.spendesk.com/glossary/purchase-order/",{"text":1140,"type":137},".",{"type":223,"content":1142},[1143],{"type":131,"attrs":1144,"content":1145},{"textAlign":25,"key":670},[1146],{"text":1147,"type":137},"Record the goods received note (GRN) when the delivery is checked against the PO.",{"type":223,"content":1149},[1150],{"type":131,"attrs":1151,"content":1152},{"textAlign":25,"key":678},[1153],{"text":1154,"type":137},"Capture the invoice and match it to the PO and GRN, checking prices, quantities, VAT, and discounts.",{"type":223,"content":1156},[1157],{"type":131,"attrs":1158,"content":1159},{"textAlign":25,"key":686},[1160],{"text":1161,"type":137},"Route the matched invoice for approval and post it to the purchase ledger and the control account.",{"type":223,"content":1163},[1164],{"type":131,"attrs":1165,"content":1166},{"textAlign":25,"key":694},[1167],{"text":1168,"type":137},"Run payments on a fixed cycle, such as weekly, with a second person authorising the list.",{"type":223,"content":1170},[1171],{"type":131,"attrs":1172,"content":1173},{"textAlign":25,"key":700},[1174],{"text":1175,"type":137},"Send each supplier a remittance advice listing the invoices the payment covers.",{"type":131,"attrs":1177,"content":1179},{"textAlign":25,"key":1178},"p-54",[1180,1182,1188,1190,1196],{"text":1181,"type":137},"A match can be two-way, PO to invoice, or three-way, which adds the GRN, as HMRC’s ",{"text":1183,"type":137,"marks":1184},"compliance guidance",[1185],{"type":192,"attrs":1186},{"href":1187,"uuid":25,"anchor":25,"target":195,"linktype":116},"https://www.gov.uk/government/publications/help-with-vat-compliance-controls-guidelines-for-compliance-gfc8/procure-to-pay-part-4",{"text":1189,"type":137}," on ",{"text":1191,"type":137,"marks":1192},"procure-to-pay",[1193],{"type":192,"attrs":1194},{"href":1195,"uuid":25,"anchor":25,"target":195,"linktype":116},"https://www.spendesk.com/events/spendesk-procure-to-pay-centralise-and-manage-your-procurement-process-from-a-to-z/",{"text":1197,"type":137}," sets out. Three-way adds evidence of delivery, and the Chartered Institute of Procurement and Supply calls it “a critical control” against error and fraud.",{"type":131,"attrs":1199,"content":1201},{"textAlign":25,"key":1200},"p-55",[1202],{"text":1203,"type":137},"Each invoice also needs a VAT code, and input tax rests on a valid VAT invoice. Where Making Tax Digital applies, HMRC expects digital links between systems rather than manual re-keying.",{"type":213,"attrs":1205,"content":1206},{"level":215,"textAlign":25},[1207],{"text":1208,"type":137},"How to reconcile the purchase ledger",{"type":131,"attrs":1210,"content":1212},{"textAlign":25,"key":1211},"p-56",[1213,1215,1221],{"text":1214,"type":137},"AP teams keep the ledger accurate with two checks: agree each supplier account to the ",{"text":1216,"type":137,"marks":1217},"supplier’s statement",[1218],{"type":192,"attrs":1219},{"href":1220,"uuid":25,"anchor":25,"target":195,"linktype":116},"https://www.accaglobal.com/gb/en/student/exam-support-resources/foundation-level-study-resources/fa1/technical-articles/supplier-statement-reconciliations.html",{"text":1222,"type":137},", and agree total supplier balances to the purchase ledger control account. Where one package posts the supplier account and the control account together, the two are unlikely to disagree; where invoices are imported or re-keyed, AP can use the control check to identify lost or duplicated transfers. Without either check, AP may discover a mismatched supplier statement on the last day of the close. You can follow both checks step by step in the guide “Supplier statement reconciliation: how to do it at month-end”.",{"type":131,"attrs":1224,"content":1226},{"textAlign":25,"key":1225},"p-57",[1227],{"text":1228,"type":137},"Most reconciling items trace back to capture, where Spendesk, an all-in-one spend management platform covering company cards, expense management, accounts payable, procurement, and budgeting, can help.",{"type":220,"content":1230},[1231,1247],{"type":223,"content":1232},[1233],{"type":131,"attrs":1234,"content":1236},{"textAlign":25,"key":1235},"p-58",[1237,1239,1245],{"text":1238,"type":137},"Its ",{"text":1240,"type":137,"marks":1241},"procure-to-pay module",[1242],{"type":192,"attrs":1243},{"href":1244,"uuid":25,"anchor":25,"target":195,"linktype":116},"https://www.spendesk.com/platform/procure-to-pay/",{"text":1246,"type":137}," can bring purchase orders and supplier invoices into one workflow for matching.",{"type":223,"content":1248},[1249],{"type":131,"attrs":1250,"content":1252},{"textAlign":25,"key":1251},"p-59",[1253,1259,1261,1266],{"text":1254,"type":137,"marks":1255},"Accounts payable automation",[1256],{"type":192,"attrs":1257},{"href":1258,"uuid":25,"anchor":25,"target":195,"linktype":116},"https://www.spendesk.com/platform/invoice-management/",{"text":1260,"type":137}," can help flag a repeated invoice when it arrives, before payment. 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