General ledger journals for office receipts

The general ledger entry for office receipts is:

• Cash accounting basis

  • Debit - Office Bank Account or LEAP Undeposited Funds - the account used depends on the payment method of the receipt. For example, cash receipts will be allocated to LEAP Undeposited Funds and EFT receipts will be allocated to a bank account.

  • Credit - depending on the items on the invoice, could be one of the following:

  • LEAP Client Fees (Time & Fees)

  • LEAP Cost Recoveries

  • LEAP Payments Received (anticipated payments and office payments)

  • LEAP Client Credits (used when a credit line is added to the invoice). Accrual accounting basis

• Accrual accounting basis

  • Debit - Office Bank Account or LEAP Undeposited Funds - the account used depends on the payment method of the receipt. For example, cash receipts will be allocated to LEAP Undeposited Funds and EFT receipts will be allocated to a bank account.

  • Credit - LEAP Debtors

• Hybrid accounting basis

Businesses that turnover £83,000 can be on the Cash scheme for VAT but must report their turnover figures using the Accruals principles.

So if you are on the Cash Accounting scheme for VAT and you are set to 'Cash' in LEAP you may benefit by opting to switch to the Hybrid method.

Your VAT return will be unaffected, but you will be able to report on a debtor in Xero.