How to Replace a Check Written in a Prior Period

I have recently received several inquiries about how to replace a lost payroll or vendor check written in a prior period without affecting the previously reported financial statements or tax reports.  If all you need to do is replace a previously written check with a new check to the same payee and for the same amount, follow these simple steps:

• In menu 1-1 Checks/Bank Charges, record a reversal of the original check by entering the original bank account, the original check number followed by the word “Void”, the current date, a description like “Void & replace lost check”, the payee name and address (or just enter the vendor number), and in the grid enter a clearing account and the net check amount as a NEGATIVE amount in the Debit Amount column. Save this entry to the current accounting period.
• Then, also in menu 1-1, record the replacement check by entering the bank account you are drawing the replacement check on, “0000” in the check number field, the current date, a description like “Replace original check number…”, the payee name and address (or the vendor number if it was used in the reversal above), and in the grid enter the same clearing account and the original net check amount as a POSITIVE amount in the Debit Amount column. Save this entry to the current accounting period also.
• Then, also in menu 1-1, click on the print button, enter the cash account for the replacement check, and print the replacement check on your check stock following the usual 1-1 check printing process.
• When next reconciling your bank account, clear the voided check and the original check, as they will offset. 

By using offsetting entries in the same accounting period, you don’t affect your accounting and tax reports.  Using the vendor number in both the reversing and replacement entries ensures that the 1099 balances are not misstated as well.

If you want additional guidance on this process, or more complex situations, give us a call at 480-471-5305.

Equipment Management (a nearly forgotten module)

How often does an owner or manager ask his accountant (or him- or her-self) “how much does that truck or piece of equipment cost us?” How often is the response to this question “we don’t know!?" Is your investment in heavy equipment, shop equipment, or vehicles a significant cost of your operation? Is the cost of owning and operating this equipment being consistently and accurately charged to jobs based on a measure of use, like miles, tons, hours, days, weeks or months? Are you recovering enough equipment ownership and operating costs in your job costing and estimating assumptions?

The Equipment Management module is designed specifically to collect and organize the cost of owning and operating equipment, and then recover that cost by charging out to jobs the estimated cost of owning and operating that equipment using estimated cost recovery rates per measure of use (i.e. per mile, per hour, per day, etc.) With the module, a thoughtful and creative implementation, and diligent bookkeeping, users no longer have to hear the answer “we don’t know!”

If you want to learn more about using the Equipment Module, give us a call at 480-471-5305.

Current Version Information

On February 18, 2016, Sage released Sage 100 Contractor Version 19.7.52.  This update includes all payroll tax table revisions known to date, and more importantly, fixes a problem created in version 19.7.43 with the Reconcile Credit Card Statement function.  I strongly encourage users to consider installing this update.