BILLSPAYABLE BILLSPAYABLE WORKSHOPWORKSHOP

Workshop outline1. Introduction

2. Bills payable

a) Reports needed to reconcile bill payable suspense account

b) Purpose of Bank Reconciliation

c) ) Accounting Entries

d) Closing

This workshop is mainly to assist the Ministries how to reconcile their Bills payable Suspense Account.

Each Ministry will have the opportunity to do their respective recon and to indentify their error's if any.

Also to understand the importance of Reconciliation.

1.1. INTRODUCTIONINTRODUCTION

Purpose of Bank ReconciliationPurpose of Bank Reconciliation

To ensure that the balance of the outstanding cheques at the end of a month and financial year is the same as the balance in the General Ledger on the Bills Payable Suspense Account. To ensure that all cheque payments have been accountant for in the General Ledger.

REPORTS NEEDEDREPORTS NEEDED

Issued Cheque ListCash Cheque ListWritten Back Cheque List (Voide)Treasury Outstanding Cheque listIFMS Cheque Analysis ReportIFMS Account Analysis Report

ACCOUNTING ENTRIESACCOUNTING ENTRIES

ISSUED CHEQUES

DEBIT - VOTECREDIT- BILLSPAYABLE

SUSPENSE ACCOUNT

ACCOUNTING ENTRIES Cont…ACCOUNTING ENTRIES Cont…

CASH CHEQUE (BANKED)DEBIT - BILLSPAYABLE

SUSPENSE ACCOUNTCREDIT - STATE ACCOUNT (ASSET

ACCOUNT DECREASE WHEN FUNDS FLOWS OUT)

ACCOUNTING ENTRIESACCOUNTING ENTRIES

WRITTEN BACK DT - BILLS PAYABLE

SUSPENSE ACOUNTCREDIT - VOTE (WITHIN THE

SAME FINANCIAL YEAR.

UNCLAIMED CHEQUES (PREVIOUS

FINANCIAL YEAR

BILLS PAYABLEBILLS PAYABLE

It also records all cheques issued by the various cheques generating systems, e.g Payroll, DSA, Accounts Payable, Manual cheques, IRD cheques.

DEFINITIONS Cont…DEFINITIONS Cont…

General LedgerThe government accounting system. All transactions are recorded in the various vote accounts or suspense accounts and reflect the transactions in the bank statement.

Bills Payable Suspense AccountBills Payable Suspense Account

Suspense Account for every Ministry reflecting the movements of cheque. This is the Ministry Bank Account and it prescribe in terms of Treasury Instruction FD0301 (d)

STATE ACCOUNTSTATE ACCOUNT

• The name of the Government’s Bank Account. The suspense account in the General Ledger is also called “State Account” Ministries are not allowed to use this suspense account. All transactions for State Account are recorded and reconciled by the Ministry of Finance (Office of the Accountant General)

Write back of a valid chequeWrite back of a valid cheque

A valid cheque may have been written back due to various reasons such a cheque drawn for a wrong amount, wrong beneficary eg.

Write BackWrite Back

It is the responsibility of the line Ministry to ensure that the correct accounting procedures, as detailed above are followed in respect of cancelled/written back cheques.

Write BackWrite Back

Accounting entries in respect of each such cheque should be verified by a line ministry with the help of monthly General Ledger Statements.

Bank Recon Form Issued cheques Bank Recon Form Issued cheques Payroll(Credits) April 2011Payroll(Credits) April 2011

Issued Cheques Bank Reconciliation List

General Ledger DifferencesIssued Cheques Bank Reconciliation List

General Ledger Differences

Bank Recon Form Issued cheques Bank Recon Form Issued cheques Accounts Payables(Credits) April Accounts Payables(Credits) April

20112011

Issued Cheques Bank Reconciliation List

General Ledger Differences

Bank Recon Form Issued cheques Bank Recon Form Issued cheques Accounts DSA(Credits) April 2011Accounts DSA(Credits) April 2011

Issued Cheques Bank Reconciliation List

General Ledger Differences

Bank Recon Form Cash cheques Bank Recon Form Cash cheques Accounts DSA(Debits) April 2011Accounts DSA(Debits) April 2011

Cashed Cheques Bank Reconciliation List

General Ledger Differences

Bank Recon Form Cash cheques Bank Recon Form Cash cheques Accounts Payroll(Debits) April 201Accounts Payroll(Debits) April 201

Cashed Cheques Bank Reconciliation List

General Ledger Differences

Bank Recon Form Cash cheques Bank Recon Form Cash cheques Accounts Payable(Debits) April 201Accounts Payable(Debits) April 201Cashed Cheques Bank

Reconciliation List

General Ledger Differences