It is important to keep control over you creditors to make sure that you have not overpaid any suppliers, and that you meet all supplier terms and conditions to avoid any penalties or interest being levied against you. The creditors at the start of the month, plus any new purchase invoices received in the month, less any payments to suppliers in the month will be the balance owed to your suppliers. Once arrived at, this figure can be compared to your list of all outstanding purchase invoices to check its accuracy.

Example

Creditors Control				£	£
				Debit	Credit
Creditors at the Start of the Month					10,521.64
(This is the creditors figure at the end of the previous month)
Total Purchase Invoices Received in the Month					8,426.98
(This is always the gross figure)
Total Purchase Payments in the Month				11,521.62
Creditors at the End of the Month				7,247.00
(This should agree to your prepared list of creditors)

List of Creditors
Details	Total
Materials	2,256.50
Phone	365.89
Car Repairs	1,257.21
Materials	2,635.49
Rates	911.91
	7,247.00

If your creditors control does not agree to the creditors list, there may be a number of reasons for this. Some common mistakes are provided below:

1. Credit notes received in the month have not been included.
2. Payments that have not been entered in the cashbook. This error should be realised when you do your bank reconciliation.
3. Mis-additions of bank payments or purchase invoices.
4. Invoices that were outstanding at the start of the period and were still not paid at the end of the period, but have been missed off the creditors list.

For further information on the bookkeeping services and training we provide please contact us.