To start with the ‘Purchases’, all Invoices which you receive from Suppliers should, where possible, be entered in date order into the ‘Purchase Day Book’ showing Date, Supplier, Invoice number followed by the Amount, V.A.T. and the Net amount extended in to a column headed for that type of expense, or into a ‘Sundries’ column with a Nominal Account code applied against the entry, the Nominal Account code is actually the Account in the Nominal Ledger to which this item will be posted.  I should mention before we go too far into this narrative that some companies in setting up their Accounts Department make it a rule that ALL Suppliers Invoices must be checked by the department responsible for the ordering of whatever the invoice relates to – it is purely a method of verification, though they should keep the Accounts Department informed of what is happening.

 This done, your next step is to enter these items into a ‘Purchase Ledger’ in which you should have individual accounts for each Supplier where you then ‘post’ each Invoice to the credit (right-hand) side of their account, showing in the ‘Purchase Day Book’ the account reference for each Supplier as you ‘post’ to the ‘Purchase Ledger’ cross referencing with the page number of the ‘Purchase Day Book’ shown against the amount ‘posted’.

 It is of help to yourself if you get into the habit of ‘Casting and cross casting’ weekly, that is adding up the columns and then their totals across to check the Main total.

 It is also to your benefit to keep any and all filing up to date.  Remember, all documents which substantiate your accounts have to be kept, by Law, for  Seven Years.

 The next book of entry is your ‘Sales Day Book’, this is entered in similar fashion showing the Date, Customer, Invoice Number, the Total, V.A.T and then the Net amount extended into the appropriate column for that source of income.

And then, as with the purchases, you ‘post’ each item into the respective Customer’s individual accounts in the ‘Sales Ledger’ showing the Invoice amount on the debit (left-hand) side noting the account reference against the entry in the ‘Sales Day Book’ and the page number of the ‘Sales Day Book’ against the item ‘posted’.

 Credit Notes can be entered, IN RED, into the respective ‘Day Book’ and ‘posted’ along with the Invoices remembering to deduct the Credits as you go and posting them on the opposite side of the account in question in the ‘Purchase Ledger’.  This said, your employer may have installed a book simply for Credits against Purchases and a separate one for Credits on Sales.

 Again it would be to your benefit to cast and cross cast on a weekly basis.

 If you are a member of an Accounts Department it may well be that you would look after either one or both of the ‘Day Books’ just referred to. 

 If this is the case then you must be prepared to deal with all and any queries that arise from your work with the other Departments within your company.

 However, I shall continue as the subject is far from complete.