Computerized accounting

Manual

Chapter One
Computerized Accounting System: An Overview
1.1) Accounting System
System is a set of two or more interrelated components that interact and work together to achieve
a goal. That is, a system is a set of inter-dependent components which collectively accomplish
certain objectives. System is a method of doing something. A system has three main elements:
inputs, processes, and outputs. The input is data, raw materials, or any thing that is must be
processed and converted into the output. Processes refer to the methods or the activities or the
procedures used or applied to convert input into output. Output is the goal to be achieved or the
end result of a system. Systems are almost always composed of smaller subsystems, each of
which performing a specific function important to and supportive of the main system. That is,
most systems are composed of smaller subsystems.

Accounting system is one of the systems used by the organizations. Accounting System is a
system which provides the information for use in conducting the affairs of the business and in
reporting to owners, creditors and other interested parties. In a general sense, an accounting
system includes the entire network of communications used by a business organization to provide
needed financial information. It consists of business papers (source document), records (journals
and ledger) and reports (financial statements).

Like any system, the elements of accounting system are inputs (financial transactions and
economic events), processes (the accounting cycle), and outputs (financial statements, other
reports, and documents)

Input Processing Output

1. Inputs represent data from source documents, such as sales receipts, bank deposit slips, and
fax orders and other telecommunications. Inputs are usually grouped by type. For example, a
firm would enter cash-sale transactions separately from credit sales and purchase transactions.

2. Processing – generally refers to the Accounting Cycle. The accounting cycle refers to a sequence of
activities which includes: documentation of financial transactions  
analysis of financial
transactions 
recording transactions in journals  
posting transactions from journals to

general ledger

analyzing general ledger accounts using trial balance and working paper  

make corrections or adjustments  

preparing financial statements from general ledger
information  
closing temporary books of accounts annually. This means they are methods or
procedures used to convert the financial transactions into meaningful financial information.

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3. Outputs are the reports used for decision-making, including the financial statements (income
statement, balance sheet, cash flows statements, and others). Many companies make better
decisions-and prospering –because of the reports produced by their accounting system. From
computer‘s viewpoint, a trial balance is also a report.

The most important principles to be followed either in installing or revising an accounting system
are: (I) cost-effectiveness balance, (II) flexibility to meet future needs, (III) adequate
internal controls, (IV) effective reporting, and (V) adaptation to organizational
structure.

1.2) Types of Accounting System: Manual, Mechanical, and Computerized

Depending on things used for data input, processing, and output, there are three types of
accounting system: (I) Manual Accounting System, (II) Mechanical Accounting System, and (III)
Computerized Accounting System
1. Manual Accounting System – uses paper and pencil to input, processing, and output. Here
everything is done manually.
2. Mechanical Accounting System – uses the manual accounting system plus some machinery
such as cash register machine or sales register machine, calculators, type writers, etc to assist
in the input, processing, and output. Even a computer may be used for purposes other than
accounting data processing.
3. Computerized Accounting System. It is also called Accounting Information System (AIS).
Computerized accounting system uses Hardware, Software, and Information Technology for
accounting data processing.

From the three types of accounting system, it is clear that accounting system can use advanced
technology; or be a simple paper-and-pencil system; or be something in between.
Chronologically, manual accounting system materialized before mechanical accounting system
and the mechanical accounting system materialized before computerized accounting system
(AIS). The first two are generally called Manual Accounting System and they are traditional as
compared the computerized accounting system, which is modern and recent.

The Accounting Cycle: Computerized versus Manual

Computerized System Manual System
 Start with the account balances in the ledger at  Same
the beginning of the period.
 Analyze and classify business transactions by  Analyze and journalize transactions as
type. Access appropriate means for data entry. they occur.
 Computer automatically posts transactions as a  Post journal entries to the ledger
batch or when entered on-line. accounts.

 The unadjusted balances are available  Compute the unadjusted balance in

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immediately after each posting. each account at the end of the period.
 The trial balance, if needed, can be accessed as  Enter the trial balance on the work
a report. sheet, and complete the work sheet.
 Enter and post the adjusting entries. Print the  Prepare the financial statements.
financial statements. Run automatic closing Journalize and post the adjusting
procedure after backing up the period‘s entries. Journalize and post the closing
accounting records. entries
 The next period‘s opening balances are created  Prepare the post closing trial balance.
automatically as a result of closing. This trial balance becomes step 1 for
the next period.

1.3) Computerized Accounting System (AIS)

AIS refers to computer-based system designed to transform accounting data into information. AIS
broadly include many transaction processing systems, the use of information technology and the
development of information systems. It focuses on the accounting aspects of business operations
that are concerned with accountability for and control of the assets and liabilities of the
enterprise, determination of the results of operations that ultimately leads to the computation of
comprehensive income, and the financial reporting of business operations.
AIS is a system that collects, records, stores, and processes data to produce information for
decision makers. That is, an Accounting Information System is a unified structure that employs
physical resources and components to transform economic data into accounting information for
external and internal users. It is a collection of resources such as people and equipment designed
to transform financial data into financial information.
AIS consist of five components (1) People: persons who operate the system and perform various
functions; (2) Procedures: both manual and automated methods used in collecting, processing,
and storing data about organization‘s activities; (3) Data: are raw facts and figures that are
processed to produce information; (4) Software: computer programs that assists in processing the
organization‘s data; and (5) Information Technology Infrastructure: includes computers, input
devices, output devices, and data communication devices, data bases, computer networks such
LAN, WAN, etc

AIS to fulfill three important functions: (1) collecting and storing data about economic activities;
(2) Transform that data into information that management can use to make decisions about
events, resources, and agents, and (3) providing adequate controls to safeguard the organization‘s
assets including its data, to ensure that the data are available when needed and are accurate and
reliable.

The functional steps in transforming data into information are: (1) Data Collection: capturing,
recording, validating and editing data for completeness and accuracy; (2) Data Processing:
classifying, sorting, calculating data; (3) Data Management: storing, maintaining and retrieving
data and then safeguarding and securing data and ensuring the accuracy and completeness of the
data; and (4) Information Generation: interpreting, reporting, and communicating information

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The computerized accounting system has many subsystems (modules). Each of the subsystem
collects, stores, and processes similar and repetitive transactions about the business activities of
an organization. The subsystems of the AIS are:
1. The expenditure cycle (expenditure system) – collects, stores, and processes data related to
buying and paying for goods or services by an organization.
2. The production cycle (production system) – consists of the activities involved in converting
raw materials and labor into finished products. (This module of the computerized system is
used only by manufacturing companies)
3. The human payroll cycle (payroll system) – consists of the activities involved in hiring and
paying employees.
4. The revenue cycle (revenue system) – consists of the activities involved in selling goods or
services and collecting payment for sales.
5. The financing cycle (financing system) – consisted of those activities involved in obtaining
the necessary funds to run the organization and in repaying creditors and distributing profits
to investors.

Advantages of Computerized Accounting System

  
It enables to handle complex and large transactions easily;
  
It increases efficiency, accuracy, speed, and timeliness;
  
It reduces cost in relation to record keeping (cost per transaction);
 
It enables storage, computation, retrieval, and auditability.

Disadvantages of Computerized Accounting System


High initial cost investment to plan, install, test, and implement the computer system
properly.Thus, it may not be cost-effective for small firms with lesser volume of data to
process.
  
Initial implementation may be time taking;
  
It requires specialized skill
 
Slow acceptance may there be by employees, clients, creditors, and auditors.

Currently, computerized accounting systems have replaced manual systems in many

organizations-even small businesses. In discussing the three stages of data processing- input,
process and output-we can observe the difference between a computerized accounting system and
a manual accounting system. The relationship among the three stages of data processing is shown
below.

1.4) Selection of Accounting Software: In-house versus Purchased Packages

Should a firm develop its own accounting software or buy externally supplied accounting
software? In-house developed software involves software that is developed by the firm internally
considering the needs of the firm. On the contrary, off-the-shelve accounting software (packages)
is accounting software that is acquired from an independent vendor. Despite the availability of
good canned software, many organizations develop their own custom software because their
requirements are unique; or their size and complexity necessitates in-house developed package.
Developing in-house software is difficult and error prone and consumes much time and resources.
The most difficult hurdles are lack of time; complexity of desired system; poor

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requirements and systems planning; inadequate communication and cooperation between

departments and users; lack of qualified staff; poor senior executive support; organizational
culture; etc

Organizations may engage an outside company to develop an accounting package for their use.
When contracting with an outside organization, a company should maintain control over the
development process. The guidelines recommended are: (I) carefully select a developer; (II) sign
a contract to clearly define responsibilities; (II) plan and monitor each step; (IV) maintain
effective and frequent communication; and (V) control all costs

Advantages and Disadvantages of the in-house developed accounting softwares

The advantages include:
  
Users involvement in creation, control, and implementation of the system
  
It easily meet user needs
  
Versatility and ease of use – easy to understand and use
  
It is customizable
  
Assurance of system compatibility;
 
Less training cost and implementation time;

  
Logic and development errors
  
Inadequately tested applications
  
Inefficient systems
 
Increased costs

Advantages and Disadvantages of off-the-shelve (purchased) accounting packages

The merits are:
  
Low risk;
  
Lower cost;
  
Shorter implementation time;
  
Standardization;

demerits are:Avoidance of an in-house effort. The
  
No users‘ involvement in creation and development the package
  
It may not meet all user needs
  
It may not be customizable
  
The system may not compatible with the existing system and hardware;
 
High training cost;

1.5) Selection criteria for off-the-shelve accounting packages

Currently, many off-the-shelve accounting packages are available in the market. Some of these
accounting packages are used by commercial organization, some by government organizations,
and some by non-governmental organizations. Commonly supplied accounting software include:
Peachtree, QuickBooks, ACCPAC, Sterling, Scala, EXACT, DacEasy, Talley, IBEX (Integrated
Budget and Expenditure System), GAS (Government Accounting Software), the Sun, and
OMICRON. The organizations shall use selection criteria for the Off-the-Shelve Accounting

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Packages. First the organization must understand that whether the accounting package meets their
requirement or not. For example, The Sun is an accounting packaged designed for Non-
governmental Organizations rather than business while Peachtree and Talley are prepared for
commercial organizations. Once the purpose of the accounting package is ascertained, some
selection criteria are used to evaluate software.

The criteria to evaluate the accounting software include:

 Conformity with specifications,

 Need for modification,

 Performance (Speed, Accuracy, Reliability),

 Use by other companies,

 Satisfaction of other users,

 Documentation,

 Compatibility with existing software,

 User-friendliness,

 Ability to be demonstrated and test-driven,

 Warranties,

 Flexibility and maintainability,

 Capability for online inquiry of files and records, &

 Vendor upgrades,

 Security and Maintenance

 
Extent of training required; and

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Chapter Two
Peachtree Accounting Basics

2.1) Introduction
Currently, there are many types of off-the-shelve accounting software: DacEasy
Accounting, QuickBooks, Peachtree Accounting, AccPac, QuickBooks, Sterling, Scala,
The Sun, etc. This course is devoted to one of these accounting software-Peachtree
Accounting. Why Peachtree Accounting to learn the course computerized accounting?
Because it commercial available anywhere and used by most organizations: service
rendering, merchandising, manufacturing, and some non-governmental organizations.

Peachtree accounting is the most complete, powerful and fully integrated accounting
system. It combines marketing, financial, and personnel information in order to provide
with necessary tools to efficient control of business operations. Accounting, as part of
business information system, has a number of applications.

There are four basic steps in converting a manual accounting system to computerized
accounting system using the Peachtree Complete Accounting Package. They are also
called initial decisions. These are:
1. Decide conversion date. Conversion Date refers to the date you will use as a starting
point. This must be a date on which you know all accounting balances, for your
customers, vendors, and employees as well as your General Ledger accounts. The data
you are entering must be accurate as of the conversion date you select. Ideally, this
date would be the beginning of your fiscal year. Or, a little less ideally, this date would
be the beginning of a fiscal period. One special feature of Peachtree is that you can
have two years open at once (up to 26 periods). This means you can keep last year's
records accessible. It also gives you a lot of flexibility as to when you convert. For
example, you can set the first accounting period to the first period of your fiscal year.
This will make next year's closing easier to manage.
2. Gather all the information needed. Names and addresses for customers, vendors,
employees, sales reps, beginning balance for your general ledger accounts, customers,
vendors, employees, inventory items, and jobs, as of the conversion date.
3. Create a company.
4. Enter the necessary information

What Sort of Data do I Need to Enter?

The term data refers to any and all of the facts that are collected, stored, and processed by an
information system. Information is data that has been organized and processed so that it is

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meaningful. In computer terminology, the information you enter, compute, and track is
called data. In Peachtree Accounting, your data takes two basic forms:
1. Maintain Data-information about your customers, vendors, employees, inventory
items, and jobs.
2. Task data-the daily transactions in your business (invoices, receipts, purchases,
payments, paychecks)

In converting from a manual system to Peachtree Accounting, much of the initial work is
gathering and entering your Maintain Data. You need also to enter some Task data: all
outstanding invoices and purchases, and payroll data if you wish to track it.

2.2) Starting the Program

After you install Peachtree Accounting, you are ready to begin. There are several ways to open
start Peachtree Complete Accounting.
1. From the Taskbar

  Programs. Locate and select the Peachtree group folder.
Select Start on the taskbar and then
Then select the Peachtree Icon.
2. From My Computer

Locate and double-click the My Computer Icon on the Windows desktop. The My
 Computer window appears.  Then select the hard drive where you installed Peachtree
(Drive C is the Default).

  is installed in c:\Program Files\Peachtree. Locate and double-click the
By default, Peachtree
Peachtree folder.
  
Next, locate and double-click the PEACHW.EXE file.
3. From the Desktop
 
From the desktop, double-click the Peachtree Shortcut Icon.

The main screen of Peachtree Accounting is displayed.

2.3) Moving Around in the Peachtree Complete Accounting

This part of the unit discusses the standard procedures for moving around in (navigating through)
Peachtree. There is usually more than one way to accomplish tasks. Some people like to use a
mouse, and some prefer entering keyboard commands. Some people prefer the traditional menu
with words, while some like to select from a button, a graphical representation of tasks. Peachtree
lets you make the choice among the following to move around in Peachtree:
  
Choosing Menus Options
  
The Navigation Aid
  
The Short Cut Keys
  
The Icon Bar
  
The Status Bar
 
Smart Guide

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2.3.1) The Peachtree Menu Options

Once you open Peachtree and a company, you have access to all the Peachtree menu
options. If you don‘t have a company open, you will have limited menu access (File,
Options and Help.) The following menus are available in Peachtree:



File. Allows you to open an existing company, create a new company, print, print
preview, set up the printed page, back up and restore company data, import or export

 files, edit payroll tax tables, and exit Peachtree.

Edit. Allows you to cut, copy, and paste objects from one place to another via the

 Windows Clipboard. You can check spelling, change record IDs, edit or delete
 records, select or save memorized transactions, and display Accounting behind the

 Screens for a selected transaction. In addition, you can add or remove lines when you
 are working with transactions. The options on this menu vary, depending on which

 area of Peachtree you are using. In addition, you can send e-mail to customers,
 prospects, and vendors as well as visit their Web sites by using the options on this
 menu. You need an Internet connection to use e-mail and Web services.

Maintain. Allows you to enter, view, or edit required information for your company‘ s
customers, vendors, employees, sales reps, chart of accounts, inventory items, item
prices (if you are using Peachtree Complete or Peachtree Premium), and job cost
items. You can also edit company information, set up memorized transactions, enter
sales tax codes, users/passwords, and default parameters for how you want your
accounting handled.

 Tasks. Allows you to enter quotes, sales orders, sales invoices, receipts, purchase
 orders, purchase invoices, payments, write checks, time and expense tickets, payroll

 transactions, and General Journal entries. You can also calculate finance charges,
 select bills to pay, select employees to pay, make inventory adjustments, reconcile
bank statements, void checks, enter action items, post and unpost information to the
general ledger (balance forward), change the accounting period, close the fiscal and
payroll years, and purge inactive items and old transactions.

Analysis. Allows you to view customized graphical overviews of the entire company
to analyze cash flow, collections of amount due from customers, payments due to
vendors, and financial status.

Options. Allows you to set global preferences for a company and to change the
system date. You can turn on (or off) the status bar, Navigation Aid, and Start Screen.
You can also set up an Internet connection within Peachtree.

Reports. Allows you to queue a list of reports for printing or viewing. You can also
create and edit the format for reports, forms, and financial statements.

Services. Allows you to access and synchronize with various Peachtree Web
resources online and manage or process downloaded Web transactions. You can also

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view Peachtree Today, set up online credit card authorization, or check for Peachtree
product updates.
  Window. Lets you decide how you want your desktop to look. 

Help. Allows you to open windows of context-sensitive Help, run a tutorial for
Peachtree, display data file statistics for the currently open company, and see which
version of Peachtree is currently installed. You can see information on ordering checks
or invoice forms for printing. You can access and print a technical support request
form for relaying any problems, questions, comments, or suggestions you may have
concerning Peachtree, as well as access Peachtree information on  the Web.
Registration information is also accessed through the Help menu.

Note: If an option on any of the menus is dimmed (disabled), it means that the option is
not available based on your current situation or you do not have access to it currently.

How to access Peachtree menu options? To do this, select an option from a menu by
using either the mouse or keyboard as described below:
a. Using Mouse - Highlight the menu option. Once the option is highlighted, release
the mouse button to select it.
b. Using Keyboard - Press ALT plus the underlined letter in the menu name, and
the menu will drop down. For example, to select the Edit menu, press ALT+E.
Note: Some menus have items or options that may have shortcut keys. These can be used
without selecting the menu. For example, to copy an item to the Windows Clipboard,
press CTRL+C.

2.3.2) The Navigation Aids

Navigation aids provide an easy way for you to get around in Peachtree. You can use
navigation aids to access certain windows. Navigation Aids appear in a bar along the
bottom of the Peachtree window and can be turned on or off from the Options menu.

Navigation Aids provide

a flexible alternative for
moving around in
Peachtree. This is how
the Aids appear in
Peachtree Complete and
Peachtree Premium. If
you are using Peachtree
Accounting, your screen
will look a bit different.

Navigation Aids are available through a series of

buttons in the navigation aids bar.
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There are eight navigation aids: Sales, Purchases, Payroll, General Ledger, Inventory,
Time & Billing, Analysis, and Company. Each button in the navigation aids bar
corresponds to a navigation aid for a specific accounting area. Time & Billing is a feature
of Peachtree Complete and Peachtree Premium only. To open a navigation aid, click a
folder. If you click the Sales button, the Sales navigation aid appears.

Each
navigation aid
contains
pictures to
help you
remember
activities that
you perform
in Peachtree.
Click the
button to go
to the selected
area.

Notice that the folder is divided into three sections. The section on the left relates to
maintenance functions; the column in the center relates to tasks; the column on the right
relates to reports. These sections correspond to the menu structure in Peachtree.

 Maintenance refers functions that apply to records or liststhat you would keep on file. In Sales,
you would maintain your list of customers and sales reps.

 Tasks refer to everyday activities that you perform.In the Sales navigation aid, this would
include the creation and printing of sales invoices.
 
Reports provide useful information about the selected accounting area

2.3.3) The Short Cut Keys

Short cut keys enable you to perform common operations by using more keys. The tables
below show the shortcut keys.
Ctrl + Letter Shortcuts
Ctrl + X Cut
Ctrl + C Copy
Ctrl + V Paste
Ctrl + E Erase/Delete
Ctrl + N New Company
Ctrl + O Open Company
Ctrl + B Backup Company
Ctrl + R Restore Company
Ctrl + F Find

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Ctrl + P Print Displayed Item

Function Keys:
F1 Displays online Help topic for the current window
Shift+ F1 Changes mouse pointer to What‘s This Help selector
F5 Saves records and posts (or saves) transactions in certain windows
F10 Toggles between the open window and menu bar
Ctrl + F4 Closes current document window
Alt + F4 Closes the application window
Ctrl + F6 Moves to next window
Shift+ Ctrl + F6 Moves to previous window
Note: Pressing Ctrl in conjunction with another key (for example, Ctrl + O) will behave
differently when the Peachtree Today window is open and active. In these cases, the
shortcut keyboard combination will behave as it would in Microsoft Internet Explorer.

Basic Window Shortcuts

On most windows, you'll see certain letters of fields or buttons underlined. This means
that if you hold down the ALT key and press the letter that's underlined, the cursor will
move to the respective field. For example, pressing ALT+D if you are in the Maintain
Vendors window moves the cursor from the City, ST, and Zip line to the Vendor ID line.
This feature is not case sensitive.
2.3.4) The Toolbar Buttons
The windows in Peachtree have several major areas. At the top of the window is the
toolbar (the icon bar) that contains the types of command buttons you can make in this
window. The toolbar bar offers representations of commands or additional windows that
pertain to the window. Some are common to most windows, while some are quite
specific. It looks similar to this:

Select any one of the buttons to perform a function. Here‘ s a brief description of the icons
window:
 
 Close. This closes the window without saving any work that has been entered since the last save.

 Save. addresses, telephone numbers, contacts for
This saves record information such as
vendors, customers, employees, and so on.

Delete. If you select this while you ‘re using a selection from the Maintain menu, the
record (customer, vendor, etc.) you're working with will be deleted. If you select this
while you‘re working with a selection from the Tasks menu, the transaction (invoice,
receipt, etc.) you‘re working with will be deleted.
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
Change ID. Select this button to change a data record ID. You can change the ID for
 the following data record types in Peachtree: general ledger accounts, customers,
vendors, employees, and items.

New. When you‘re working
 you  in the Maintain windows, this clears the current record and allows
to enter a new one.

Event. This allows you to schedule an event for a customer/prospect, vendor, or
employee/sales representative. You can also use it to see detail on system-generated
events. Note: The Event feature is 
available only in Peachtree Complete and Peachtree
 Accounting, not First Accounting.

Log. This displays events recorded for an individual company or record over a range
 
of time you specify. Note: The Log feature is available only in Peachtree Complete
and Peachtree Accounting, not First Accounting.
 
Letters. Select this button to process a mail merge.

 In the Select a Report window, use the
Letters button to create a mail merge for the
currently chosen mail merge template.

In the Maintain Customers/Prospects, Maintain Vendors, or Maintain
 Employees/Sales Reps window, use the Lettersbutton to create an
individual mail merge for the currently open record.

Help. This appears on most windows. Selecting this gives you information specific to
the current 
window. The fields of this window are often listed at the bottom of the
Help topic.

2.3.5) The Status Bar

The Status bar displayed at the bottom of the main Peachtree screen offers a brief
explanation of the current field or text box, and the text changes as the cursor moves. It
also shows the current Peachtree system date and the current accounting period. If you set
up alerts, an alarm clock will appear in the status bar to alert you. It also includes buttons
for accessing basic maintenance and task screens, such as Maintain Customers and
Receipts. In addition, the following options are available customize toolbar Account
register, Windows calculator, and Peachtree Accounting Help.

At the bottom of the main

window, Peachtree displays the
customizable main application
toolbar, which includes the
date and current
accounting period, among
other useful applications.

You can turn off the status bar by deselecting it on the Options menu. (The option will be
unchecked). To this end, do the following
 Computerized accounting
Manual
 
From the Options menu, uncheck View Custom Toolbar.

2.3.6) Smart Guide

Peachtree helps you enter data by filling in fields once you begin typing and opening lists
automatically when you select a field where a list is available. This is known as Smart
Data Entry. As you type, Smart Data Entry fills in remaining text as you enter information
that is already stored. For example, as you begin entering a customer ID, Peachtree fills in
the remainder. You can choose whether you want Smart Data Entry to automatically fill
in text for you. You can also choose whether you want lists (such as a customer ID list or
item ID list) to open automatically. Smart Data Entry preferences are set in the Maintain
Global Options window, available from the Options menu.

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Chapter Three
Working with Companies and Setting up New Company
3.1) The Start Screen
When you first start Peachtree, there is a Start screen to help you figure out where to go
next.

You have the following options on start screen:


 
Open an existing company: Opens an existing Peachtree company.
 Set up a new company: Walks you through the setup of a new company.



Take a guided tour of Peachtree: Introduces you to Peachtree through an online tutorial
 called The Guided Tour. You‘ll explore  the basics of Peachtree Accounting, as well as
learn about features new to Peachtree.

Explore a
 your sample company: Allows you to use a sample company so you can experiment on
own.

Convert from a QuickBooks or One-Write Plus company: Allows you to convert

your QuickBooks, QuickBooks Pro, or One-Write Plus company data to the Peachtree
format.

The Start Screen vs. the Menus

From the Start screen, you can open a company, set up a new company, view the online
Guided Tour, explore the sample company, or convert a company from Quickbooks or
One-Write Plus to Peachtree. From the Options menu, you can choose whether or not you
want to view the Start screen. If you choose not to display the Start screen, Peachtree
automatically opens the last company that you were working in. If you don‘t want to
display the Start screen whenever you enter Peachtree, make sure the Show Start Screen
at Startup box is unchecked. To display the Start screen after startup, from the File menu
select Open Start Screen.
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 Computerized accounting
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3.2) Set up a New Company

Peachtree walks you through the process of creating a new company. This makes it easier
to get your new company started. You only need to enter a minimum amount of
information to initially set up your company. This information includes the chart of
accounts, your accounting method, your posting method, and your accounting periods.
Setting up your company is easy with the New Company Setup wizard. This wizard
walks you through creating a new company and prompts you for each piece of
information you enter. You can run New Company Setup in two different situations:
  
When you set up your first company in Peachtree
 
When you set up an additional new company in Peachtree after working in another
company on the system
There are also two procedures for starting New Company Setup:
1. Starting from the Peachtree Startup Window. The Peachtree Startup
window appears when you open Peachtree.

 
From the Peachtree Startup window, select Set up a new company. The
system displays the New Company Setup - Introduction window.
2. Starting from the Peachtree Menu. You can use this procedure to start New
Company Setup at any time in Peachtree.

From the File menu, select New Company. If you are in another
 company, a warning window alerts you that opening a new company
will close the current company.
 
Select OK.
The system displays the New Company Setup - Introduction window. This is the first
window of the setup process. It lists the areas you will be setting up as you use the wizard.

Read the introductory information. Select Next to continue setting up your company.
Peachtree displays the New Company Setup - Company Information window. Here,
you enter general information about your company.
 
Enter the company name, address, phone, and fax information.

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 Computerized accounting
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
From the list in the Business Type field, select your business type. The business type
defines the kind of business you run. Your selection here determines the makeup  of the
Equity section of your chart of accounts. You can change the business type at any time.

Select Next to continue setting up your company. Peachtree displays the

New Company Setup - Chart of Accounts window.

Select one of the setup options on the window. Then select Next to continue setting up
your chart of accounts. Peachtree displays the New Company Setup – Accounting
Method. Select either the Accrual or Cash option.
When you set up your company, you must indicate if you will use a cash or accrual
accounting method. The choice between cash and accrual accounting is final. You cannot
change this decision after you finish New Company Setup. The only way to change
accounting methods is by setting up a new company all over again.

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 Computerized accounting
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Select Next to continue setting up your new company. Peachtree displays the New
Company Setup - Posting Method window. Select either the Real Time or Batch
option.
You must choose whether you want Peachtree to post your transactions as they are
entered (real time) or if you want to wait and post transactions in a group (batch posting).
Remember that in batch posting, the transactions you enter are saved to a temporary
holding area, where you can review them before posting the batch to the general ledger. In
real-time posting, the transactions you enter are posted as you save them. You can edit
your transactions in either of the methods, and you can change the method at any time.

Select Next to continue setting up your new company. Peachtree displays the New
Company Setup - Accounting Periods window. You should select either the option
button for 12 monthly accounting periods or Accounting Periods that do not match
the calendar months.

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Many companies set up their fiscal year, which is their defined yearly time period for
doing business, so that it contains 12 accounting periods that correspond to the calendar
months. It is not unusual, however, to start the fiscal year with some month other than
January and to end it with some month other than December. Also, some companies set
up fiscal years so that they contain more or fewer than 12 periods.

If you selected 12 monthly accounting periods, Peachtree displays the following window.
Here, you specify information for your standard accounting periods.

If you selected Accounting periods that do not match the calendar months, Peachtree
displays this window. Here, you set up your custom accounting periods.

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Once you finish New Company Setup, you cannot change your accounting periods. Make
sure you have these set correctly before you select the Finish button.

3.3) Open a Company

The ―Open an existing company‖ command (or Open Company from the File menu)
gives you access to previously created companies. To open a company from the Start
Screen:

Select Open an existing company (the first option). When Existing Company
 the name of the company from the Company Name list box,
window appears, select
and then select OK.
When you want to open a company from the Start screen, the following window appears:

You can see the

folder where the
company data resides,
as well as the last time
changes were made to
a company.

Click and drag to widen

the column if you need to
see the entire path.

To open a company from the File Menu:


From the File menu, select Open Company. When the Open Company window
appears,select the name of the company you want to open, and then select the OK
button.

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The menus now appear for the company chosen. Any accounting transactions you enter
are logged into the books for the company you opened. Notice that File is still the first
menu available.
If you already have a company open when you choose to open another company, a
message alerts you that this will close the current company. Select OK to close the
company.

Open an Existing Company

If you have multiple companies set up in Peachtree, you can quickly see a list of recently
opened companies by selecting Open Previous Company from the File menu.

3.4) Back Up Your Company

Backing up your company frequently is an important part of maintaining your Peachtree system.
Peachtree provides a simple backup utility. Backing up your company files can save you hours of
time. Having frequent backups ensures you against the necessity of reentering your data. How
often you back up and which method you choose depends on how you use Peachtree. It is
important that you back up your company data files on a regular basis in case information is
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 Computerized accounting
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accidentally deleted or corrupted. You can then restore your data, if necessary. To back up your
company data files and customized forms using the Peachtree format, use the following
procedure:

1. From the File menu, select Back Up. Peachtree displays the Back Up Company
window.
2. Select the Reminder check box if you want to be prompted to back up in a specified
number of days.
If the specified numbers of days have elapsed since your last Peachtree backup,
Peachtree will display a reminder message when you close the company or exit
the program.
3. Select the Include company name check box if you want Peachtree to incorporate
your company name in the name of the backup file it creates.

4. Click the Back Up button to enter or select where you want to save your Peachtree
backup file. If you are not prepared to back up your company data at this time, click
Close.
5. In the Save Back Up As window, at Save in enter or select the path where you want to
save your backup copy.
6. At File name, enter the name for the backup copy. Peachtree offers a default file name
that includes the current system date—for example, Fortune Retail Company-
011208.ptb. You can change this if you like. Peachtree backup files use the *.ptb file
extension.
For increased security, avoid backing up data over existing backups.
You do not have to specify the location of your data files. Peachtree locates these
based on the company that is currently open.

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7. Click the Save button. Peachtree displays one of the following:

o If you are backing up to your hard drive, the estimated size in megabytes (MB)
of your backup.
o If you are backing up to an external source such as diskette or ZIP drive, the
number of diskettes needed.
8. Click OK. The system displays the progress of the backup until it is complete.
If you are backing up to diskettes, Peachtree will prompt you to insert the first and
subsequent diskettes, as needed. You should number these diskettes as instructed.
Note: Depending on the quantity of data, the backup process may take a while to
complete. Be patient and do not interrupt the process. If you interrupt the backup
process, you might damage your data.

3.5) Delete a Company

In some cases you may want to remove a company created in Peachtree, possibly to start
over. In order to delete a company, you must exit Peachtree and delete the company data
folder using Windows Explorer. You should make a backup of the company‘s data if
there is any possibility you may need the information later. It is also recommended that
you back up data on your hard drive before beginning this procedure.

To delete a company:
1. Open Peachtree and the company you want to eventually delete.
2. From the Help menu, select Customer Support and Service, then select File
Statistics.
3. Write down the company short name displayed in the title bar of the File Statistics
window. The title bar displays "Data File Statistics for XXX," where XXX is the
"short version" of your company name.

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 Computerized accounting
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This is the short

version of your
company name.

4. Exit Peachtree.
5. From the Start menu, select Programs, and then click Windows Explorer.
6. Locate the \PEACHW folder using one of the following methods:

If Peachtree is installed locally not installed on a network or company data
 is shared from this computer), select the folder and directory  where
Peachtree is located. \PEACHW is the default directory name.
 
If Peachtree is installed on a network, select the drive and folder where Peachtree
is located. \PEACHW is the default directory name
Note: The default folder for Peachtree First Accounting setup is \PTFIRST.
7. Double-click the \PEACHW folder to display subfolders. One of the subfolders
should be named the same as the short company name you wrote down earlier.
8. Select the company folder that matches the company short name. This is your
company data.
9. To remove the company data, press the Delete key. Select Yes to confirm that you
want to delete all the folder contents. Your company is removed. It will not be
available when you open Peachtree.

3.6) Restoring Company Data

Restore command enables you to retrieve information that was saved using the back up
function. Restoring a company replaces all information in the open company with the
information stored in the back up file. Because all data are interrelated, you can‘t restore
individual company data files.

If you backed up company data using Peachtree's backup utility, follow the steps below
to restore your data. If you backed up company data using an alternate utility (for
example, a tape program), you must use that program to restore your company data.
Warning: When you restore company data, all data entered after the company was
backed up will be lost and will have to be reentered.

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To restore a company:
1. Open the company you want to restore.
2. From the File menu, select Restore. Peachtree displays the Select Backup File
window.

3. Choose the folder, hard drive, diskette drive, network drive, or data storage device
connected to your computer where your Peachtree backup file is located. Peachtree
backup files use the *.ptb file extension.
4. Select the backup file you want to restore.
5. To begin restoring data, select the correct .ptb file, and then select the Open button.

A warning message appears telling you that backing up is a potentially dangerous

process and suggesting that you make a current backup of data files.
6. To continue, select OK.
7. The Restore Options window appears, letting you decide which files you want to
restore:

 To restore all backed-up custom
forms, such as customized invoices, select the
Customized Forms check box.

To restore all Web transactions in the Peachtree Web Transaction Center,
select the Web Transactions check box. All unprocessed Web transactions
 
(those listed in the Inbox list and Exceptions list) that were synchronized
using the PeachSync wizard after the date of the backup will be lost.

 To restore all backed-up data files for 
the company, including customized forms,
select the Company Data check box.
8. Select the Restore button.
If you are restoring data from diskettes, the system will request you to insert the
first and subsequent diskettes, as needed.
During the restore process, Peachtree displays a progress indicator.
Note: Depending on the quantity of data, the restoration process may take a while
to complete. Be patient and do not interrupt the process. If you interrupt the
restoration process, you might damage the data.
3.7) Parts of a Window

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When you select a menu option, typically you will see a window that you can enter information into.
Entering information in a window allows you to communicate with the program. Let‘s look at a typical
window, the Maintain Customers/Prospects window. Below, we‘ll discuss the most important features of
this window.

This is the toolbar.

These are the Back

and Next buttons.

This is a folder tab.

This is a field with a

drop-down list.

This is a field with

a lookup.


The Toolbar Buttons. The toolbar offers graphical representations of commands or additional
windows that pertain to the window. Some are common to most windows, while some are quite specific.

 The Drop-Down List. Many windows have fields with lists of information  from which you make a selection.
When you select the arrow next to a field, a list of items will appear.

Lookup Fields. Lookup list s are ind ica t ed by a button wit h a magnifying g lass. When
you‘r e in a lookup field, the pointer also changes to an I-bar with a plus (+) and question
 mark (?) beside it. In a lo okup field, you can either select from a list 
of records—such as
vendors, customers, accounts, and so on—or you can enter a new record.

Back and Next Buttons. Use these buttons to navigate through a list of existing records. On
maintenance windows, the buttons are usually located to the right of the appropriate record
field—for example, the Customer ID field in the Maintain Customers/Prospects window. On
 as Sales/Invoicing, buttons appear in the upper right corner, under the
task windows, such
window toolbar.

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Chapter Four
General Ledger
4.1) Introduction
The general ledger is the heart of any accounting system. All of the transactions you
process in your business eventually get posted or stored in the set of accounts known as
your general ledger. This set of accounts is called the chart of accounts.
You can think of these accounts as holding places for money—either money that you have
in hand or money you can reasonably expect to receive or pay. Each time you post a
transaction, Peachtree makes an entry to at least two accounts in your general ledger. One
of these accounts is called a credit and one a debit. Once you‘ve selected a chart of
accounts and set up your company, most of this accounting stuff takes place behind the
screen. But the point is: as a true double-entry accounting system, we make sure the
credits always equal the debits, so your books stay in balance. And whenever you or your
accountant needs to see that accounting stuff, it‘s all there, stored in your general ledger.
4.2) Setting Up General Ledger
Before you begin recording your company‘s activity, you must set up general ledger
information, including your chart of accounts. The process of setting up a chart of
accounts for the first time is different depending on whether you are converting from a
computerized or manual accounting system.

If you are converting from a computerized system, you will import your account
 information, and then convert it.

If you are working from a current manual system, you'll have to be sure to accurately
transfer all
 the account information, including account types and numbers, to
Peachtree.
Once your chart account is set up, however, it's an easy matter to add additional general
ledger accounts.

Selecting Account Types

Account types define how the account will be grouped in reports and financial statements.
They also control what happens during fiscal year-end. General Ledger accounts are
assigned types on the General tab of the Maintain Chart of Accounts window.

Account types are important, because:

 They can be selection criteria for reports.

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  They set the order in which accounts display on financial statements. 

 They control what happens during fiscal year-end.

You can choose from several different account types while setting up a new account in
Peachtree. Below are the Peachtree account types you can choose from:
   
 Expenses
Accounts Payable
   
 Accounts Receivable  Fixed Assets
   
 Accumulated Depreciation  Income
   
 Cash  Inventory
   
 Cost of Sales  Long Term Liabilities
   
 Equity – Does not Close  Other Assets
   
 Equity - Gets Closed  Other Current Assets
   
Equity - Retained Earnings Other Current Liabilities

At the end of the fiscal year, the balance amounts on the Income, Cost of Sales, Expenses,
and Equity Gets Closed account types become zero. The net difference is added to the
retained earnings account. You can only create one account using the Equity Retained
Earnings account type. Since all the accounts types provided by Peachtree are clear and
distinct, need is only to describe the capital section account types.
Peachtree account types are discussed here under

Accounts Payable. Represents balances owed to vendors for goods, supplies, and
 services purchased on open account. Accounts payable are used inaccrual-based
accounting, are generally due in 30 or 60 days, and do not bear interest.

Accounts Receivable. Represents amounts owed by customers for items or services
sold to them when cash is not received at the time of sale. Typically, accounts
receivable are recorded on sales invoices that include terms of payment. Accounts
receivable are used in accrual-based accounting. Select this account type if you are
 setting up accrued income that customers owe.

 asset account to depreciable (fixed) assets such as
 Accumulated Depreciation. It is a contra
buildings, machinery, and equipment.

Cash. It represents deposits in banks available for current operations, plus cash on
hand consisting of currency, undeposited checks, drafts, and money orders. Select this
 
account type if you are setting up bank checking accounts, petty cash accounts, money
market accounts, and certificates of deposits (CDs).

Cost of Sales. Represents the known cost to your business for items or services when
 
sold to customers. Cost of sales (also known as cost of goods sold) for inventory items
are computed based on the inventory costing method (FIFO, LIFO, or Average Cost).

Equity - Doesn't Close. Represents equity that is carried forward from year to year
 and want to
(like common stock). Select this account type if you are a corporation
record common stock or other equity intended as owner investment.
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 Computerized accounting
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
Equity - Gets Closed. Represents equity that is zeroed out at the end of the fiscal year
with the amounts moved to the retained earnings account.Select this account type if
 your business is a proprietorship and you want to record dividends paid topartners or
if you are a corporation and want to record dividends paid to stockholders.

Equity - Retained Earnings. Represents the earned capital of the enterprise. Its
 balance is the cumulative, lifetime earnings of the company that have not been 
distributed to owners. You can have only one retained earnings account in Peachtree.

Expenses. Represents the costs and liabilities incurred to produce revenues. The assets
surrendered or consumed when serving customers measure expenses. Select this
 account type if you are setting up accounts such as operation expense,supplies
expense, salary and wage expense, travel expense, or charity expense.

Fixed Assets. Represents property, plant, or equipment assets that are acquired for use
in a business rather than for resale. They are called fixed assets because they are to be
 used for long periods oftime. Select this account type if you are setting up any of the
following fixed assets:
  
Land: Property, storage space, or parking lots.
  
Buildings: Structures in which the business is carried out.
  
Machinery: Heavy equipment used to carry out business operations.
For example, you may want to set up any of the following: store
equipment or fixtures, factory equipment or fixtures, office equipment or
fixtures (including computers and furniture), and delivery equipment
(including autos, trucks, and vans used primarily in making deliveries to
 customers).

Income. Income (also known as revenue) represents the inflow of assets resulting
from the sale of products and services to customers. Select this account type if you are
setting up sales revenue accounts. It is common practice to create different income
 accounts for each category of revenue that you want  to track (for example, retail
income, service income, interest income, and so on).

Inventory. Represents the quantity (value) of goods on hand and available for sale at
any given time. Inventory is considered to be an asset that is purchased, manufactured
(or assembled), and sold to customers for revenue. Select this account type if you are
setting up assets that are intended for resale. It is common practice to create different
accounts for each category of inventory that you want to track (for example, retail
 inventory, raw materialsinventory, work in progress inventory, finished goods
inventory, and so on).

Long-Term Liabilities. Represents those debts that are not due for a relatively long
period of time, usually more than one year. Portions of long-term loans due and notes
payable with maturity dates at least one year or more beyond the current balance sheet
date are considered to be long-term liabilities. Select this account type if you are
setting uplong-term liabilities (for example, long-term loans and noncurrent notes
payable).

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
Other Assets. Represents those assets that are considered nonworking capital and that
are not due for a relatively long period of time, usually more than one year. Notes
receivable with maturity dates at least one year or more beyond the current balance
sheet date are considered to be ―non-current‖ assets. Select this account type if you
  organization costs, amortization expense, non-
are setting up assets such as deposits,
current notes receivable, and so on.

Other Current Assets. Represents those assets that are considered nonworking
capital and are due within a short period of time, usually less than a year. Prepaid
expenses, employee advances, and notes receivable with maturity dates of less than
one year of the current balance sheet date are considered to be ―current‖ assets. Select
 this account type if you are setting up assets such as prepaid expenses, employee
advances, and current notes receivable, and so on.

Other Current Liabilities. Represents those debts that are due within a short period
of time, usually less than a year. The payment of these debts usually requires the use
of current assets. Select this account type if you are setting up accrued expenses from a
 tax
vendor, extended lines of credit, short-term loans, sales tax payables, payroll
payables, client escrow accounts, suspense (clearing) accounts, and so on.

Numbering Accounts
How you number your chart of accounts is up to you. However, you should establish a
consistent, logical system that everyone who uses Peachtree can easily understand. In
setting up a numbering system for your chart of accounts, you should be aware of the
following:
  
Account numbers can contain any printable character except *, +, and?
  Account numbers cannot contain leading or trailing spaces. Spaces in the middle are allowed.


  Account numbers are case sensitive (e.g., CASH and Cash would be different accounts).

Account numbers are sorted alphabetically, in ASCII sort order. This means that
numbers come before letters, and numbers are looked at in a binary fashion. For
example, the following numbers are in ASCII sort order: 1, 100, 1000, 27. To
 
reorder them in a decimal fashion would require a four-digit coding scheme: 0001,
0027, 0100, 1000.
 
Only one account can use the Retained Earnings account type.

4.3) Entering or Modifying Your Chart of Accounts

The Chart of Accounts window is used
  to add new accounts,
  to modify the description of an existing account,

 
to delete an existing account,

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 Computerized accounting
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  
to make an account inactive,
  
to change the account type for an account, or
 
to create a budget for either or both the current and next fiscal years.

Steps to Create a Chart of Accounts

1. Select the Chart of Accounts option from the Maintain menu. Peachtree displays
the Maintain Chart of Accounts window.
2. Enter an account ID and description for the account. The account ID determines
how the account is identified and sorted in the chart of accounts list. Most charts of
accounts are set up with specific account types grouped together.
Hint: Enter Account ID: 1020
Enter Account Description: Cash in Bank-Saving
3. Select an account type from the drop-down list.
4. When you‘re finished filling in the window, click the Save icon.

You can
select or
add another
account ID
from either
the General
or Budget
folder

The information for your chart of accounts is divided into two tabs:

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 Computerized accounting
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  General
 a feature of Peachtree Accounting and Peachtree
Budgets. The Budgets tab is Premium, budget information is entered in the

Complete only. In Peachtree
Maintain Budgets window.
When you first open the window, the information in the General tab appears. You can
begin entering this information or select the Budget tab to display this year‘s and next
year‘s budget information.

4.4) Entering Chart of Accounts Beginning Balances

Peachtree assumes that you are entering beginning balances for your accounts when you
select the Beginning Balances button. If you have posted transactions, Peachtree assumes
that you are entering adjustments to your accounts for a period in a prior year. If you enter
a new account, Peachtree assumes that this account has a zero balance. You may find it
easier to add all necessary accounts and then create one cumulative beginning-balance
entry.
Steps to Enter Beginning Balances
1. From the Maintain menu, select Chart of Accounts. Peachtree displays the
Maintain Chart of Accounts window.
2. Select the Beginning Balances button. Peachtree displays the Select Period
window.
3. Select the period in which you want to enter beginning balances. The accounting
period you would be selecting is the previous period whose balances are the
opening balances for your Peachtree accounting company.
4. Select OK. Peachtree displays the Chart of Accounts Beginning Balances
window.
5. Click or tab to any of the white cells in the grid to add an amount. (The gray cells
are for viewing purposes only.)
6. Enter all the beginning balances for the accounts. Scroll the list box to make sure
the account amounts are correct.
7. For normal balances, you will enter positive numbers. If necessary, you can enter
a negative amount; just enter a minus sign before the number. You might want to
enter a negative balance:
 for contra accounts (ask your accountant about these)

  if you're a new company still operating "in the red" (with a negative retained
earnings account)

  if you are converting in mid-year and have recorded dividends paid, then this
account balance would be entered as a negative.
 at any time an account has a balance that is the opposite of its normal balance. 
8. Select the OK button when you're finished

What If I‘m Out of Balance?

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If you are out of balance, a message will appear warning you that an equity account will
be created (or updated) to contain the difference or out-of-balance amount. This account
will be named Beginning Balance Equity, and its type is Equity— Doesn‘t Close. This
account does not appear in the Beginning Balances window, but it will appear in the list
of accounts and on financial statements and general ledger reports.

This kind of warning

message will appear if you
are out of balance for your
chart accounts beginning
balance.

You should try to find the reason for the out-of-balance situation and correct it if possible.
(Select Cancel when the warning message appears.) If you are entering beginning
balances from financial statements supplied by your previous accounting system or by
your accountant, you most likely made an error in data entry. Make sure you didn‘t leave
out an account or balance and that you entered all amounts correctly.
The trial balance will be zero when you have entered all balances accurately. If you still
cannot find the error, you can select OK at the warning message. Your books will be in
balance, and you can proceed with setting up your company. Then later, if you find the
cause of the out-of-balance situation, you can go back to the Beginning Balances or Prior
Period Adjustments window and correct the situation. You can even begin entering and
posting transactions. (Remember that once you post transactions, you will need to enter
Prior Period Adjustments and not Beginning Balances.) Once the Beginning Balance
Equity account has no transactions associated with it, you can delete the account.

Add a New Account in G/L Beginning Balances

In the Beginning Balances window accessed from the Maintain Chart of Accounts
window, select the New button. Peachtree displays the Enter New Account window.
Steps to Add a New Account in G/L Beginning Balances
1. Enter an account ID and description for the account. To display a list of existing
accounts, type ? in the G/L Account ID field, or select the Lookup button.
The account ID determines how the account is identified and sorted in the chart of
accounts list. Most charts of accounts are set up with specific account types
grouped together.
2. Select a type for the account.
3. Select OK.

Viewing Beginning Balances

The Period History window reflects the balances you have entered for each account. The
first entry of the period history is the period that you are currently working in. This should
also be the period that is displayed on the status bar.
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 Computerized accounting
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4.5) Entering and Allocating Budget Information

Entering and allocating budget information is possible only in Peachtree Accounting and
Peachtree Complete Accounting. You can assign budget dollar amounts for each account
for the two open fiscal years. You can enter individual amounts for each account period or
allocate a dollar amount to be distributed throughout the fiscal year. Budget information
can be displayed in reports and financial statements.
1. From the Maintain menu, select Chart of Accounts. Peachtree displays the
Maintain Chart of Accounts window.
2. Enter or select the account ID to which you want to add budget information. To
display a list of existing accounts, type ? in the G/L Account ID field, or select the
Lookup button.
3. Select the Budgets tab.
4. Enter budget amounts for this year and the next.

You can enter

individual
amounts for each
period or allocate
a total amount and
have it distributed
to all periods.

5. There are two methods of entering budget amounts.

o You can enter different budget amounts for each accounting period. As you
enter each amount, the total amount will be calculated.
o You can also enter one budget amount for the fiscal year and select
Allocate. Peachtree will divide and distribute equal amounts that add up to
the entered total for that fiscal year.
6. Select the Copy button to duplicate budget information from the first fiscal year to
the second year.
7. When finished, select Save to record the account's budget information.

4.6) Deleting an Account from the Chart of Accounts

In order to delete an account from the chart of accounts, there must be no transactions
posted to the general ledger that reference the account ID If an account has a nonzero
balance, you must delete or remove transactions associated with it. These can include
beginning-balance entries. If an account has a nonzero balance, you can enter an adjusting
G/L transaction in the General Journal to bring the account's balance to zero. Then, after
two year-end closings, you can purge or delete the account.

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To make the account inactive

You can make the account inactive to ensure that no further transactions are associated
with it. Then after two year-end closings, you can purge the account.
1. From the Maintain menu, select Chart of Accounts. Peachtree displays the
Maintain Chart of Accounts window.
2. Select the account you want to make inactive.
3. Select the Inactive check box to the right of the account ID. (There is an X in the
check box when it is selected.)

To delete an account immediately

1. From the Maintain menu, select Chart of Accounts. Peachtree displays the
Maintain Chart of Accounts window.
2. Enter or select the account ID you want to remove.
3. Select the Delete toolbar button to remove the account.

If the account has a nonzero balance in any accounting period within the two currently
open fiscal periods, Peachtree displays a message stating that you cannot delete the
account.

If you still want to remove an account that has had a nonzero balance at one time,
examine the history of the account in the Maintain Chart of Accounts window. Then,
display the General Ledger report ing a date range of the two open fiscal years. Locate the
account transactions; then double-click to display the corresponding task window where
the transactions originated. Finally, delete these transactions, and return to the general
ledger. To remove an account beginning-balance entry, select the Beginning Balances
button in the Maintain Chart of Accounts window.

4.7) Recording a General Journal Entry

The General Journal is used to enter those types of transactions that are not readily
categorized in the Tasks menu. This journal is unique—it‘s the only journal in which you
provide all the accounting distributions. In all the other journals, Peachtree automatically
distributes certain amounts based on defaults you establish. But here, in the General
Journal, you enter both debits and credits to balance the transaction. In the General
Journal, you can:

 Enter a transaction
 that doesn‘t fit into the other journals—for example,
depreciation
  
Reverse a transaction
  
Enter an adjusting transaction
 
Set up a recurring transaction

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You can view the running total of your entries in your Out of Balance field. When the Out
of Balance total is zero, the distribution is correct, and you can save and/or post this
journal entry.

To enter transaction on General Journal Entry

1. From the Tasks menu, select General Journal Entry. Peachtree displays the General
Journal Entry w.

Select the Reverse

Transaction checkbox to
automatically reverse a
transaction on the first
day of the next accounting
period. When a
transaction is reversed,
debits become credits and
credits become debits

The Out of Balance

amount is zero
when you have
correctly balanced
2. Enter or select the date of the transactions you want to enter.
all accounting
distri3b.utiSonesl.ect the Reverse check box to have the transaction automatically reversed the
first day of the next accounting period. Reversing means that debits become credits and
credits become debits.
4. Enter a reference.
5. For each line enter or select an account ID.
6. For each line enter an amount in either the Debit or Credit columns.
7. For each line enter a description for the transaction. The description will appear in
General Ledger and various reports.
8. Once the Out of Balance field is zero (0.00), select Save to record the transaction in
the General Journal.
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Note that the General Journal Entry window is essentially a table where you enter debit
and credit distributions to specific accounts for the General Journal transaction. Before
you save the transaction, the total debit amount must equal the total credit amount. If you
are unsure about whether an account should be debited or credited, check with your
accountant.

4.8) Entering General Ledger Defaults

In the General Ledger Default information; you set the account that Peachtree Accounting
will use for rounding any odd amounts on financial statements. You don‘t have to set this
account if you do not want to round amounts to either whole dollars or whole thousands
of dollars on financial statements.
If you choose to round financial statement amounts, Peachtree collects all rounding
amounts and prints the collected amount in the rounding account on your financial
statements. The account you select can be any equity account since it is a temporary
holding area, but it is recommended that you use equity account, retained earnings. To set
general ledger default,

General Ledger from
From the Maintain menu, select Default Information; then select
the submenu and specify the rounding account and click on OK.

This account is only used to store

rounding differences for financial
statements. You can select any
account, but we recommend the
Retained Earnings account.

4.9) Change Accounting Period

Accounting periods define segments of your fiscal year. Peachtree permits you to operate
within two open fiscal years. The Change Accounting Period window serves two
purposes. First, it informs you of your company's current fiscal year and payroll tax year
setup. Second, this window permits you to move to an alternate account period.

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Typically, you'll do this at the beginning of each new accounting period. To open the
Change Account Period window, do one of the following:
  From the Tasks menu, select System, then Change Accounting Period.
Click the Accounting Period button on the Peachtree main application toolbar.
If the Change Accounting Period option is not available, then your user profile does not
have security access to this area.

Open Accounting Periods: A list of accounting period numbers and dates for your
company's two open fiscal years. Accounting period dates are defined during the New
Company Setup p and cannot be changed once they are set up. Most companies operate
with twelve accounting periods per fiscal year. To move to a new accounting period or
edit an old transaction in a previous accounting period, select the period from the drop-
down list box. You can change this to any other period in the one or two fiscal years for
which you have set accounting periods.
Note: If you have security rights activated in Peachtree, a lock icon appears next to prior
accounting periods. You can restrict users from editing transactions in prior accounting
periods by giving them Read access to Transactions in Prior Periods. This setting is on
the System t of the Maintain Users window, under the Tasks Program Area.

Current Accounting Period: Identifies the accounting period number and dates
Peachtree is currently operating in. If the current system date is within the current
accounting period date range, Peachtree dates new transactions automatically based on
your system date.
It also displays the current dates for the first and second fiscal years as well as the first
and second open payroll tax (calendar) years.

Open Fiscal Years: Identifies the two open fiscal years in which you can enter new or
edit old transactions. The first fiscal year is typically referred to as the current year, the
second is referred to as the next fiscal year. To change the dates, you must close a fiscal
year using the Year-End wizard.

Open Payroll Tax Years: Identifies the two open payroll (calendar) tax years used in
payroll transactions and reports. To change the dates, you must close a fiscal year using
the Year-End wizard.

4.10) Accounting Behind the Screens

When you enter transactions in Peachtree, journal entries are automatically created based
on generally accepted accounting principles. Peachtree is a true accounting system that
enforces the double-entry accounting standard. It creates both the debits and credits for
you. Much of the accounting is behind the screens, allowing you to concentrate on the
transaction information rather than the accounting entries.

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Journal entries that Peachtree creates are based on various defaults you have set up for
your company. If you want to examine or even edit these journal entries, select the
Journal button in various task windows. The Journal button displays the Accounting
Behind the Screens window; it lists all the journal entry distributions that Peachtree will
assign to the transaction, how the accounts are debited and credited, and the final journal
entry that will be posted to the general ledger if the transaction is completed. You can
even modify the G/L account assignments for certain distributions.
Accounting behind the Screens is available in the following task areas:
  
Accounts Receivable: Quotes, Sales Orders, Sales/Invoicing, and Receipts
  
Accounts Payable: Purchase Orders, Purchases, and Payments
 
Payroll: Payroll Entry
Depending on what type of task is open, the Accounting Behind the Screens window
displays the journal tab(s) that correspond to the transaction. For example, if you are
editing a payment, the Cash Disbursements Journal appears.

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If you are editing a sales invoice that has a payment applied to it in the Sales/Invoicing
window, both the Sales Journal and Cash Receipts Journal appear.

Chapter 5
Account Receivables System

5.1) Introduction
Peachtree organizes and monitors the money that comes into your business from your
customers. The money that you receive from customers is tracked in accounts receivable
(also known as sales). In accounts receivable, you can enter and save customer
information, set payment terms, set finance charges, enter sales tax information, and
determine your aging categories. Peachtree provides you with the ability to print customer
quotes, sales orders, invoices, statements, credit memos, and collection letters. Using
Peachtree, you can also produce a variety of accounts receivable reports.
Accounts receivable provides four different flexible tasks. All of the tasks work together.
You can use the tasks that best suit your business. These tasks include:

Quotes: Allows you to send a customer a quote that includes the price of items you
 sell, services you provide, freight charges, sales taxes, and so on. Onceyour customer
accepts the quote, you can convert it to a sales order or sales invoice.

Sales Orders: Allows you to track customer backorders for items you do not have in
stock and invoice for items you do have in stock. You can invoice a customer multiple
 times from one sales order. You can view reports on items you have backordered for a
customer.

Sales/Invoicing: Allows you to enter and print invoices for your customers and ship
and prepare invoices for items entered on sales orders. Even if you are a cash-basis
company, you can use invoicing to track your sales and gain a better picture of your
 although the amounts entered in this task do not affect your
outstanding balances,
general ledger.

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
Receipts: The central accounts receivable task, where you enter the money you
receive from your customers. If you invoice customers, you can apply customer
receipts directly to particular invoices. If 
you generally make cash sales, you can also
enter these directly into the Receipts task.

5.2) Entering Customer Defaults

You can enter customer default information or copy it from an existing company when
you set up a new company. Default information is automatically used for each new
customer you enter. However, you can change these defaults for individual customer
records. To open customer default, do the following:
 
From the Maintain menu, select Default Information; then choose Customers.

Use the Terms and Credit

tab to enter payment terms,
credit limit and status, and
general ledger account
defaults for all customer
records.

Use the Account Aging tab to

establish aging categories and
indicate whether your
receivables are aged by the Use the Pay Methods
invoice date or the due date. tab to define various
ways your customers
Use the Finance Charges pay you and set up
tab to set up customer deposit ticket defaults.
Use the Custom Fields tab to customize finance charge calculations
customer information Customwithfiver for unpaid invoices.
defaultsblankfieldsare separatedthatyoucanby
optionally add to reports.

Five tabs: Terms and Credit, Account Aging, Custom Fields, Finance Charges, and Pay
Methods.

Terms and Credit. You can enter a set of standard terms to be used for all customers. You
may change these terms for a specific customer record in the Maintain Customers/Prospects
window. When you change the standard terms on this window, the terms for all customers
  You should select a Standard Terms option that
who use standard terms change automatically.
represents the majority of your customers.

Account Aging. You can establish whether your receivables are aged by the invoice date or
the due date. Note that to optimize cash flow, most businesses age accounts receivable by due
date rather than invoice date, but you can choose invoice date if that‘s how your company
operates. You also set the ranges of days you want to use for aging your  receivables. This
information is reflected on the Aged Receivables report. The information

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also appears in the Collections Manager window. Choose the number of days for each column
on the report; this sets the limit for overdue invoices that appear in the column. Then choose
the heading you would like to appear in each column of the report.

The # of days field For each column, you

sets the limit for can enter a heading that
overdue invoices prints above it on the
to appear in that aging report.
column on the
report.


Custom Fields. You can customize your customer information with five blank fields,
which can optionally appear on reports. Custom fields allow you to enter information
about your customers you may want to remember, such as additional contacts, referral
names, or even birthdays. Once you set up the custom field labels here, you can enter
 the field information in the  individual customer record from the Maintain
Customers/Prospects window.

Finance Charges. You can add finance charges to customer statements for unpaid
invoices over a specified period of time. Defaults on this tab are used when calculating
finance charges for your customers. If you do not want to calculate finance charges for
  this when you set up payment terms as part of
an individual customer, you can change
the customer‘s default information.

Payment Methods .You can enter a list of the different types of payment methods you
accept, such as cash, check, or credit cards. You can then select payment-method
information in the Receipts window and from the Sales/Invoicing window. Peachtree
sets up a default list for you when you create your company, but you can customize
this list to suit your
needs. Payment methods are recorded on sales receipts for
 reporting purposes.

The payment methods you set up here will be the default methods used in the
Receipts and Receive Payment windows. However, you can customize receipt
  customers by changing their payment default settings in
settings for individual
Maintain Customers.

 IDs are generated:
In addition to payment methods, you can establish how deposit tickets
from the Receipts window or from the Select for Deposit window.

Credit Status Definitions

On Terms and Credit tab of Customer Default window, the following credit status
options are available

 You can save all transactions for the customer regardless of the customer‘s
No Credit Limit.
credit limit.

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
Notify Over Limit. A warning will display when you try to save a transaction for the
 limit. Then, you
customer if the transaction puts the customer balance over their credit
can close the warning message and continue to save the transaction.

Always Notify. A warning will display every time you save a transaction for the
 customer regardless of the customer‘s credit limit. Then, you can close the warning
message and continue to save the transaction.

Hold Over Limit. An error message will appear when you try to save a transaction for
the customer if the transaction puts the customer balance over their credit limit. You
  unless you change the transaction amount or
will not be able to save the transaction
change the customer‘s credit setting.

Always Hold. An error message will appear when you try to save a transaction for the
customer, regardless of the customer‘s credit limit. You will not be able to save the
transaction unless you change the customer‘s credit setting.

5.3) Entering Sales Tax Authorities

Sales tax authorities are components of sales tax codes, which calculate taxes on sales to
customers. You must first enter a vendor (usually a government or government agency).
Then you assign this vendor and a sales tax-payable general ledger account to the sales
tax authority.
1. Enter a vendor. Add the agency to whom you pay taxes as a vendor. This is the agency
where you send sales tax checks. To open the Maintain Vendors window, do the
following:

From the Maintain menu, select Vendors. 
Vendor ID ERCA
Name Ethiopian Revenues and Customs Authority Sales
taxes are set up in two areas:

 items on customer invoices, which is
Sales Tax Codes: the overall rate applied to taxable
composed of rates entered as sales tax authorities.

Sales Tax Authorities: the governments or other taxing agencies and their tax rates that are
used to assemble the sales tax codes.

2. Enter sales tax authority
 
From the Maintain menu, select Sales Taxes; then select Sales Tax Authorities.

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Fields in the Maintain Sales Tax Authorities window include:

  
ID and Description: Identifies the sales tax authority record.

 Tax Payable To: Identifies the vendor who is
the taxing authority governing this tax (for
example, Federal Inland Revenue Authority).

 Sales Tax Payable G/L Account: Indicates which liability account to  update when sales
transactions are recorded. Typically this is a sales tax payable account.

Tax Calculation: Identifies the sales tax as based either on a single tax rate or a
formula. If your state charges at a single tax rate, select Single Tax Rate,and then
 enter the rate as a percentage. For example, to enter 1 percent, type 1.00.

3. Enter sales tax codes. Sales tax codes are made up of one or more sales tax
authorities.
 
From the Maintain menu, select Sales Taxes; then select Sales Tax Codes.

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Fields in the Maintain Sales Tax Codes window include:


  tax code that is listed in sales transaction windows
ID and Description: Identifies the sales
such as Quotes and Sales/Invoicing.

Tax Freight: Indicates whether or not  freight charges included on sales invoices should be
considered in sales tax calculations.

5.4) Adding a Customer or Prospect Record

You can view or enter basic information about your business clients in the Maintain
Customers/Prospects window. You can customize terms information, set up other invoice
defaults, and enter billing and shipping information, contacts, and so forth. Maintain
Customers/Prospects window allow you to

 
add a new customer record,
 change existing customer information,

 
Or delete a customer record.

To open the Maintain Customers/Prospects window, do the following:

 
From the Maintain menu, select Customers/Prospects.

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The Maintain Customers/Prospects window is very similar to the Maintain Vendors

window. In Peachtree, customer transactions are handled much like vendor transactions,
only reversed.
Customer information is divided into seven areas: Header fields, General tab, Sales
Defaults tab, Terms and Credit tab, Payment Defaults tab, Custom Fields tab, and History
tab.

 tabs, the top portion of the information stays the same.
Header Information. On the different
This is called header information

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In the header fields (shown above), you can enter a new customer ID and name. You
can also choose whether to make the customer record inactive or not.

Customer ID: Enter a new ID of up to 20 alphanumeric characters, or select an
existing customer ID from the list. This field is case sensitive. Peachtree sees
AAA001 and aaa001 as different IDs. To view or modify a current customer
 record, you can use the Lookup button to select the customer from a list or type a
question mark to view the list.

Name: Enter the name you want to appear on all accounts receivable windows,
  If you select an existing customer record, the
forms, and reports for this customer.
name automatically fills in here.

Prospect: Select if this record is a potential customer. Prospects do not appear on
the Aged Receivables or Customer Ledger reports. A prospective customer
 becomes a regular customer when  this check box is cleared or when an invoice or
receipt is entered for the prospect.

Inactive: Select this check box to mark the customer record as inactive and eligible
 for purging. If you tryto enter a transaction with this customer, you will be warned
of the inactive status.

General. It includes the customer‘s billing and shipping addresses, sales tax
 information, customer type, telephone and fax numbers, e-mail address, and Web
site address.
  Terms and Credit .This includes payment terms, credit limit amount, and credit status.

Payment Defaults. This tab includes the customer‘s address, credit card number, expiration
date, and Receipt window settings.

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
Custom Fields. It allows you to customize customer information with five fields.
You can add these fields to your customized reports. These fields are set up in the
Customer Defaults window. For example, if you have set up a Second Contact
field in Customer Defaults, here on the Custom Fields  tab you would enter the
 actual name of the additional contact for the customer.

History. This shows information about the selected customer record, including the
customer-since date and invoice and payment dates and amounts. When entering a
new customer record, you may edit the information on this tab. Once you save the
customer record, however, you can no longer edit the history data.

5.5) Entering Customer Beginning Balances

Customer beginning balances are essentially unpaid sales invoices you have issued to
customers prior to the first transaction date in Peachtree. Let‘s say that your first fiscal
year with Peachtree begins July 1. In this case, you can enter beginning balance invoices
with dates June 30 or earlier.

Beginning balance invoices are not posted to the general ledger. It is assumed that all
unpaid sales invoices prior to starting Peachtree are entered as a single beginning balance
amount for your accounts receivable account in Maintain Chart of Accounts. To enter
beginning balance invoices for customers, do the following:

From the Maintain menu, select Customers/Prospects. In the Maintain
Customers/Prospects window, enter or select the customer ID that you want to

enter as a beginning balance, then click the Beginning Balances button on the
General tab.

Customer Beginning Balances window will display:

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There are two tabs in the Customer Beginning Balances window: Invoices for and
Customer Balances.

Invoices for. This tab lists each outstanding customer invoice dated prior to when
you started using Peachtree. You can adjust these transactions until you apply a
receipt to them. When a receipt is applied to a beginning balance invoice, the
 invoice line appears on a gray background. To modify  a paid invoice, you must
delete the receipt (in Peachtree‘s Receipts window).

Customer Balances. It lists outstanding balances for existing customers. Select
 for tab appears listing
and double-click a customer name in the list. The Invoices
all beginning balance sales invoices for the customer.

5.6) Entering a Sales Quote

Quotes are estimates for goods and services that you provide to your customers or
potential customers (prospects). When you enter a quote for a customer, you are not
updating any accounting information or inventory levels. Peachtree calculates what the
total cost of a sale will be for a customer, including sales tax and freight. You can then
print the quote for the customer. When your customer agrees to the sale, quotes can easily
be converted to sales orders or sales invoices. To enter a sales quote for a customer or
prospect, do the following:
 
From the Tasks menu, select Quotes/Sales Orders; then select Quotes.

5.7) Converting a Quote

Once your customer accepts a quote, you can convert it to either a sales order or a sales
invoice. Once you convert a quote, you can no longer edit the quote in the Quotes
window. You must open the Sales/Invoicing or Sales Orders window, depending on which
option you selected when you converted the quote. To convert a quote, do the following:


From the Tasks menu, select Quotes/Sales Orders; then select Quotes. Open
 button. You
the sales quote that you want to convert, and then click the Convert
can only convert quotes dated in the current accounting period.

Below are options for converting quotes:


Sale/Invoice: Converts the quote to an invoice available for editing on the
Sales/Invoicing window. If you already have an invoice number for this quotes and
  leave
will not print the invoice, enter the number in the Invoice # field. You can also
the Invoice # field blank to assign the invoice number when you print later.

Sale/Invoice and Print Now: Allows you to convert the quote to an invoice and
immediately print the invoice. Peachtree opens the standard dialog boxes to
select the invoiceform you want to use and provides you with the next available
invoice number.

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
Sales Order: This option lets you convert the quote to a sales order so you can
invoice the customer for a partial shipment of items—for example, if some of the
items are not in stock. Peachtree willdisplay the next available sales order
number when you convert the quote.

When you convert a quote, the quote number is retained for reference. You cannot edit the
quote in the Quotes window, but the quote number will appear in the Sales Orders or
Sales/Invoicing task window.

5.8) Entering Sales Orders

A sales order is a document containing a list of items or services your customers want to
buy from you. You might think of it as representing intent to sell. When you post a sales
order, none of the accounting information is updated, since you have not actually shipped
the items on the sales order.

Peachtree‘s Sales Order window is where you enter a sales request for items from a
customer. No accounting information is updated when you post the order. Instead,
accounting information is updated only when you ship the items on the sales order and
enters them on the Sales/Invoicing window, or if you're using cash accounting, when you
receive payment from the customer.
To enter a sales order for a customer, do the following:
 
From the Tasks menu, select Quotes/Sales Orders; then select Sales Orders.

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If needed,
click the
Ship To
button to
change the
shipping
address.

Enter or
select a
Ship By
date. This
will help
you
manage
the order
and the
items
needed to
fill it.

Select the arrow button to the right of the Terms automatically fills with the
customer balance to display the current customer’s default terms. If you want
Customer Ledgers report for this to show special terms for this customer
customer. on the order, enter new terms here.

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In the Sales Orders window, you can choose to hide certain data-entry fields that you do
not want to view. This will increase your data-entry speed.

5.9) Shipping Items from a Sales Order

After you have entered a sales order for your customer, the next step is to collect the items
that you need to ship to the customer. If you do not have items in stock, you can purchase
them. As purchased items are received or items are collected in your warehouse, you ship
the items and invoice your customers. Once you enter the quantity of items you are
shipping, you can print the invoice and have Peachtree assign an invoice number, or you
can enter the invoice number if the invoice was prepared manually and you will not print
it from Peachtree.
Shipping items on the sales order creates an open sales invoice in Peachtree, updating
your inventory and accounts receivable information. You can have multiple invoices
based on the same sales order; however, you cannot ship items from more than one sales
order on the same invoice. To ship items to a customer from a sales order, do the
following:
1. From the Tasks menu, select Sales/Invoicing. Peachtree displays the
Sales/Invoicing window.
2. Enter or select the customer ID.
3. If this customer has open sales orders, the Apply to Sales Order tab appears in
front.
4. Enter the invoice number in the Invoice # field
5. From the drop-down list on the Apply to Sales Order tab, select the sales order
number that you want to ship items from. Peachtree displays the items on the
order in the line-item list.
6. Enter the quantity of the item you plan to ship from the sales order.
7. If you plan to ship all of the items, select Ship All from the Edit menu or click
the Ship b and choose the All option. Selecting Ship None removes all entries
from the Shipped field.
8. Select the sales tax code for this sale.
9. When finished, select the Save button to save the transaction.

5.10) Collecting Receipts from Customers

Generally, you will use the Receipts window whenever a customer makes payments on
specific invoices, pays cash for a non-invoiced sale (also known as a cash sale) or makes
prepayments before an invoice is entered. If a customer pays for a sales invoice the same
day you enter it in Peachtree (referred to as a time-of-sale receipt), you can also use the
Sales/Invoicing window to enter the receipt.

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When you enter a receipt in Peachtree, the transaction is posted to the Cash Receipts
Journal, and the general ledger is updated. If you are applying a receipt to a sales invoice,
the invoice payment status is also updated accordingly.
To sum up, there are three basic methods of entering customer payments in the
Receipts window:
  
Apply a receipt to one or more sales invoices.
  
Enter a cash sale for which you do not enter a sales invoice.
 
Receive payment for a future sale.


1) Receiving Invoice Payment

When a customer pays an invoice, enter the amount in the Receipts window. To enter
customer payment on an invoice
1. From the Tasks menu, select Receipts. Peachtree displays the Receipts w.
2. Enter or select the customer ID.
3. Enter a deposit ticket ID.
4. Enter a reference number that will help identify the receipt (for example, the
customer's check number).
5. Select a payment method (for example, Cash or Check).
6. On the Apply to Invoices tab, select the Pay check box next to each invoice that
the customer is paying.

If the customer has paid the invoice in full, place the cursor in the Amount
 column for the invoice,and select the Pay check box. Peachtree will fill in
the Amount Paid field.

 If the customer has only paid a partial amount on the invoice, enter that amount.
Peachtree will automatically select the Pay check box.
7. When finished, select Save to save the transaction.

If your customer pays for an invoice the same date you enter the invoice, you can quickly
enter the customer‘s receipt in the Sales/Invoicing window. To do this, click the Amount
Paid at Sale arrow button at the bottom of the Sales/Invoicing window with the customer
invoice displayed.

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If your
customer
has paid for
the invoice
the same day
they are
invoiced,
click the
Amount
Paid at
Sale button.

2) Recording a Cash Sale

In Peachtree, cash sales are receipts that don‘t require entry of a customer invoice. There
are two basic types of cash sales, which you can enter in the Receipts window:

You can enter a payment from a customer not stored in Peachtree by leaving the
Customer ID field blank. For a cash sale from a customer not on file (no customer
 ID exists), you must either enter a newcustomer ID or enter the one-time customer
information in the appropriate fields.
 
You can enter a cash sale from an existing customer by selecting the Apply to Revenue tab.

3) Entering Customer Prepayments
The Apply to Revenues tab of Receipt window has a Prepayment check box. Prepayments
in Peachtree are any receipts for which you don‘t yet have a sales invoice. They could be
for a down payment, or just to allocate funds for a pending sale. When you designate a
receipt as a prepayment, you can print the receipt and post it as you normally would.
Note, however, that if you select the Prepayments check box, you can only enter one line
on the Apply to Revenue tab. You cannot select a customer invoice and pay it at the same
time you enter a prepayment. You can later apply the prepayment to a sales invoice.

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After you post the prepayment and enter the customer ID in the Receipts window, the
prepayment appears as a credit transaction (a negative amount) on the Apply to Invoices
tab.

5.11) Entering Credit Memos (Customer Refunds)

A credit memo is a document that specifies returns or credit amounts that are added to a
vendor or customer account balance. For example, credit memos are issued to customers
for returned merchandise or service refunds.
Use the Credit Memos window to enter credit memos for customer returns and credits;
you can apply credit memos to any existing customer invoices. All entries made on this
window are posted to General Ledger, customer records, and possibly inventory records.
To enter a credit memo, do the following:
1. From the Tasks menu, select Credit Memos. Peachtree displays the Credit
Memos w.
2. Enter or select the customer ID.
3. In the Credit # field, enter the ID that you want to apply to the credit memo.
Note: You may want to connect the application amount to the credit memo. For
example, if this credit memo is based on an existing invoice no. 106, you may
want to type 106-C to indicate that the credit memo is applied to the invoice.
4. If the transaction date is different from the one displayed, enter or select a new
date.
5. The Credit Memos window has two tabs: Apply to Invoices and Apply to Sales.
Do one of the following:
o If the credit memo is to be applied to an existing invoice for the customer, on the
Apply to Invoices tab, use the drop-down list to select the appropriate invoice.
When line-item information for the invoice appears, find the item or items to
be returned, and in the Returned column enter the quantity. Peachtree will
automatically restore this quantity to inventory.
o If the credit memo is to be applied to a sale for which there is no existing
invoice, on the Apply to Sales tab, enter line-item information for the item or
items to be returned or credited, including quantity. Peachtree will
automatically restore this quantity to inventory.
6. When finished, select Save to save the transaction.

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Chapter Six
The Accounts Payable System

6.1) Introduction
Peachtree organizes and monitors accounts payable, the money you pay to suppliers or vendors.
You can set up vendors, payment terms, aging guidelines, and more. Creating a list of these items
makes entering purchases and payments simple and fast. The main tasks in accounts payable are:


Purchase Orders: When you need to make a purchase, you can create a purchase order.
Once you enter the vendor‘s ID, Peachtree automatically fills in the vendor name and
 address, your standard payment terms, and even the usual general ledger  purchase
account. You can edit this information, but in most cases you won‘t need to.

Purchases/Receive Inventory: Once the items you have ordered arrive, you receive the
items on the purchase order. Peachtree allows you to receive partial amounts of an item,
or amounts greater than what you originally ordered. You can also enter new items that
may not have been on the original purchase order. If you are not using purchase orders,
 you can enter a traditional purchase invoice.

Payments: Paying for purchases is easy. When you select the vendor ID in the Payments
window, a list of open invoices for that vendor appears. Select the Pay box next to the
invoices you want to pay. You can print a check then, or print a batch of checks when it‘s
 Also, you can pay a group of vendors at once, using the Select for
more convenient.
Payment task.

6.2) Entering Vendor Defaults

Defaults are information you enter one time that will automatically appear in windows or is
automatically used by the system. In the Vendor Defaults window, you define the default vendor
payment terms, account aging, and custom fields available when you add vendors using the
Maintain Vendors window. Setting up the default information saves you time when you enter
your vendors. You may edit these defaults for each vendor.
The information in the Vendor Defaults window is displayed as several tabbed folders with a
label on each tab. To view the information on that tab, select the tab. To open the Vendor
Defaults window, do the following:

 select Default Information. Then choose Vendors. Peachtree
From the Maintain menu,
displays this window.

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Use the Payment

Terms tab to enter
payment terms for
all vendors

Use the Account Aging tab

to establish whether your
payables are aged by the
invoice date or the due

Use the 1099 Settings tab to make 1099 assignments

Use the Custom Fields tab to customize
vendor information with five blank fields for each of the General Ledger accounts in your chart
that you can optionally add to reports of accounts.

There are four areas you can define default information for:


Payment terms. You can enter a set of standard terms to be used for all vendors. You
may change these terms for a vendor in the Maintain Vendors window. When you change
the standard terms on this window, the terms for all vendors who use standard terms
 change automatically. You should select a Standard Terms option that represents the
majority of your vendors.

Account Aging. You can establish whether your payables are aged by the invoice date or
the due date. Note that to optimize cash flow, most businesses age accounts payable by
due date rather than invoice date, but you can choose invoice date if that‘s how your
company operates. You also set the ranges of days you want to use for aging your
payables. This information
 is reflected on the Aged Payables report and in the Payments
 Manager window.

Custom Fields. You customize your vendor information with five blank fields, which
can optionally appear on reports. Once you set up the fields 
here, you can enter
information into the field in the Maintain Vendors window.

You can select these

boxes to enable the
custom fields.

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On Custom Fields you can enter your own labels to keep track of specific information.
For example, you could enter ―Office Manager‖ as a field label and keep the office
manager‘s name at your fingertips.

 will be made for each of the
1099 Settings. You can establish how 1099 calculations
General Ledger accounts in your chart of accounts.

6.3) Adding a Vendor Record

The Maintain Vendors window stores information about the companies and people from whom
you purchase goods and services. It is also where you set up government agencies to whom you
pay taxes, or bank institutions if you pay your taxes to banks using federal coupons. This
information is displayed as four tabbed folders with a label on each tab. The fields on only one
tab are visible at a time, but you can view the fields on another tab by clicking the tab label.

Use this procedure to set up a new vendor record.

1. Do one of the following:
From the Maintain menu, select Vendors. Then click the Vendors icon on the Purchases
Navigation Aid. Peachtree displays the Maintain Vendors window.
2. Enter a new vendor ID, and complete the necessary vendor information.
 3. When you're finished filling in the window, select the Save button.

Maintain Vendors window allow you to

  
Add a new vendor record,
  
Change existing vendor information, or
 
Delete a vendor record.


The Maintain Vendors window is very similar to the Maintain Customers/Prospects window. In
Peachtree, vendor transactions are handled much like customer transactions, only reversed. Here,
you are the customer.
























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Use the Header fields

above the tabs to set
up vendor ID and
vendor name.

Use the General tab

to enter general vendor
information, such as
address and contact.

Use the Purchase Defaults

tab to enter vendor purchase
information, such as
purchase account number
and terms.

Use the Custom Fields tab to customize vendor Use the History tab to enter historical
information with five fields, which you can add information, such as the vendor-since date and
to customized reports invoice and payment dates and amounts.

Vendor information is broken up into five areas: Header fields, General tab, Purchase Defaults
tab, Custom Fields tab, and History tab.

Header Information. On the different tabs, the top portion of the information stays the same. This is
called header information.

In the header fields, you can enter a new vendor ID and name. You can also choose whether to
make the vendor inactive or not.

General. Information on the General tab includes contact name and vendor address
information. You may also specify a custom vendor type, 1099 information, telephone and
fax numbers, e-mail address, and Web site address. Do not select the Beginning Balances
 have entered the rest of the vendor information and are ready to save the
button until you
vendor record.

 Purchase Defaults. You must enter a default purchase account number on this tab. This is normally
an expense account.

Custom Fields. Peachtree allows you to customize vendor information with five fields; you
  to your customized reports. These fields are set up in the Vendor
can add these fields
Defaults window.

History .The History tab in the Maintain Vendors window shows information about  the selected
vendor, including the vendor-since date and invoice and payment dates and amounts.

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When entering a new vendor record, you may edit the information on this tab. Once you save
the vendor record, however, you may no longer edit the data.

6.4) Entering Vendor Beginning Balances

Vendor beginning balances are essentially unpaid purchase invoices (bills) you have received
from vendors prior to the first transaction date in Peachtree. For example, let‘s say that your first
fiscal year with Peachtree begins July 1. In this case, you can enter beginning balance invoices
with dates June 30 or earlier.
Beginning balance invoices are not posted to the general ledger. It is assumed that all unpaid
purchases prior to starting Peachtree are entered as a single beginning balance amount for your
accounts payable account in Maintain Chart of Accounts.
To enter beginning balance invoices for vendors, do the following:

From the Maintain menu, select Vendors. In the Maintain Vendors window, enter or select
the vendor ID that you want to enter a beginning balance for, then click the Beginning
Balances button on the General tab.

Vendor Beginning Balances window will display.

Click the Vendor Balances

tab to display and select
beginning balances for other
vendors.

The Current Accounts

Payable Balance displayed
here is the total of all vendors
beginning balance invoices
entered in your company.
This total should match the
accounts payable beginning
balance entry in your chart of
accounts.

There are two tabs in the Vendor Beginning Balances window: Purchases from and Vendor
Balances.

Purchases from. Here, enter amounts for each outstanding vendor invoice dated prior to
when you started using Peachtree. You can adjust these transactions until you apply a
payment to them. If a payment has been made on an invoice, it will appear on a gray

background. To modify this paid transaction, you need to delete the payment made against it
(in Peachtree‘s Payments window).

If you have set up your company on an accrual basis, you must enter an accounts payable
(A/P) general ledger account. If your company is set up on a cash basis, the  words <Cash
Basis> will appear in the A/P Account field, and the field will not be available.

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
The beginning balance amount should not include any transactions that you have already
entered in task windows, such as the Purchases window. Be sure that the total amount of your
vendor beginning balances is equal to the amount you entered as a beginning balance in your
chart of accounts for your A/P account(s).

 for existing vendors. Select and

Vendor Balances. This tab lets you check on balances tab appears listing all beginning
Purchases from
double-click a vendor in the list. The
balance purchases from the vendor.

6.5) Entering Purchase Orders

A purchase order is a document containing a list of items or services you want to buy from a
vendor. You might think of it as representing intent to purchase. The Purchase Orders window is
where you enter a purchase request for items from a single vendor. To order from multiple
vendors, use the Select for Purchase Order option; No accounting information is updated when
you post the order. Instead, accounting information is updated only when you receive the items
on the purchase order and enters them on the Purchases/Receive Inventory window, or if you're
using cash accounting, when you pay the vendor. To enter purchase order for your vendor, do the
following:
 
From the Tasks menu, select Purchase Orders.

In the Purchase Orders window, you can choose to hide certain data-entry fields that you do not
want to view. This will increase your data-entry speed.

6.6) Receiving Inventory from a Purchase Order

After you have entered a purchase order for your vendor, the next step is to receive the inventory
for that purchase order as it arrives. Peachtree allows you to receive a different quantity for an
item than you originally ordered; that is, you can receive less or more than the originally ordered
quantity. You can also receive items into your inventory, even if you have not yet received the
invoice from your vendor.

Receiving items on the purchase order creates an open vendor invoice in the system, updating
your inventory and accounts payable information. You can have multiple invoices based on the
same purchase order; however, you cannot receive items from more than one purchase order on
the same invoice.

To receive items on the purchase order, do the following:

1. From the Tasks menu, select Purchases/Receive Inventory.

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If you have not yet

received the vendor
invoice for the shipment,
select Waiting on Bill.
You can then post this
invoice but not pay it.

Use the Apply to

Purchase Order# drop-
down list to select the
purchase order number
you want to receive
inventory against...
Enter vendor Invoice #,
a required field.

Select the arrow button to the right of the

vendor balance to display the current If you paid for the invoice in full at the time
Vendor Ledgers report for this vendor. of purchase, enter the amount paid here.

2. Enter the vendor ID. If this vendor has open purchase orders, the Apply to Purchase Order
tab appears in front. You then simply select the purchase order.
3. From the Apply to Purchase Order # drop-down list, select the purchase order number you
want to receive inventory against.

The Purchases/Receive Inventory window has two tabs: Apply to Purchase Order and Apply to
Purchases. This window allow you to receive items on a previously entered purchase order or to
enter invoiced items you purchased from a vendor but did not enter on a purchase order.

Apply to Purchase Order: When you select a vendor who has open purchase orders, the
  Order tab appears, allowing you to select which purchase order to receive
Apply to Purchase
items against.

Apply to Purchases: If you select a vendor with no open purchase orders, this tab appears by
default, so you can record a vendor invoice. In addition, when you receive items on a
purchase order (on the Apply to Purchase Order tab), you can also select this tab toenter
additional items that are not on the purchase order but which are in the same shipment.

6.7) Entering Disbursements in the Payments Window

There are three basic methods of entering disbursements in the Payments window:
  Apply to vendor invoices, previously entered as purchases.
 
Enter a cash purchase for which you do not receive a vendor invoice.

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  Write a check as prepayment of a future purchase. 
6.7.1) Paying a Vendor Invoice
There are two basic methods of paying vendors:
1. Apply vendor invoices: pay previously entered invoices in the Purchases window.
2. Apply to expenses (cash purchase): pay a vendor without using a vendor invoice.

In the Payments window, you can pay existing vendor invoices. When you enter or select a
vendor ID, any open purchase invoices previously entered for that vendor appear on the Apply to
Invoices tab. To apply a payment to vendor invoices, do the following:
1. From the Tasks menu, select Payments.
2. Enter or select the vendor ID that you want to pay. For unpaid invoices for this
vendor, Peachtree lists them on the Apply to Invoices tab.
3. Select the Pay check box to each the invoice that you want to pay.

  for the invoice, and
If you want to pay an invoice in full, place the cursor in the Amount column
select the Pay check box. Peachtree will fill in the Amount Paid field.

 amount on the invoice, enter that amount. Peachtree will automatically select
If you want pay a partial
the Pay check box.
If you are entering
a handwritten
check, enter the
check number in
the Check Number
field. If you want
Peachtree
Accounting to print
the check, leave this
field blank.

When you enter or

select a vendor with
outstanding invoices,
the Apply to
Invoices tab appears
by default, listing
any open invoices. If
you are not paying a
specific invoice (this
is a cash purchase)
choose the Apply to
Expenses tab.

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6.7.2) Entering a Cash Purchase

In Peachtree, cash purchases are disbursements that don‘t require entry of a vendor invoice as a
purchase. There are two basic types of cash purchases, which you can enter in the Payments
window:
1. You can enter a payment to a vendor not stored in Peachtree, by leaving the Vendor ID
field blank.
2. You can enter a cash purchase from an existing vendor by selecting the Apply to Expenses
tab.

1. From the Tasks menu, select Payments.

2. Enter or select the vendor ID that you want to pay. Or type in the name in the Pay to
the Order of field.
3. Select the Apply to Expenses tab.

6.7.3) Entering a Vendor Prepayments

In the Payments window, the Apply to Expenses tab has a Prepayment check box. Prepayments
or deposits in Peachtree are any disbursements for which you don‘t yet have a vendor invoice.
Later, you will apply it to a vendor purchase. To enter a deposit or prepayment, follow these
steps:
1. From the Tasks menu, select Payments.
2. Enter or select the vendor ID that you want to pay.
3. Select the Apply to Expenses tab. Then, select the Prepayment check box.
After you post the prepayment and enter the vendor ID in the Payments window, the prepayment
appears as a credit transaction (a negative amount) on the Apply to Invoices tab.

6.8) Write Expense Checks

In Peachtree, Write Checks is a simplified version of the Payments window. It provides no
allowances for paying an invoice or making a prepayment. Instead, you will use Write Checks
whenever you need to pay an uncomplicated expense for which there is no invoice and no need to
track inventory items. In addition, Write Checks lets you distribute the entire payment to a single
expense account, though you can also make multiple individual line-item distributions if needed.

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If you are entering a

handwritten check,
enter the check
number in the
Check Number
field. If you want
Peachtree to print
the check, leave this
field blank.

If this payment requires multiple line-item

distributions, select the Split button.

Note: All checks written in either the Payments or the Write Checks window are listed in the
Cash Disbursements Journal.

6.9) Entering a Vendor Credit Memo

Occasionally, a vendor may issue you credit. You can apply credit memos either to an existing
vendor invoice or to a direct sale without an invoice. Use the Vendor Credit Memo window to
enter credit memos for returns to and credits from a vendor. All entries made on this window are
posted to General Ledger, vendor records, and when applicable, inventory records. To enter a
vendor credit memo, do the following:
1. From the Tasks menu, select Vendor Credit Memos. Peachtree displays the Vendor Credit Memos
window.
2. Enter or select the Vendor ID.
3. In the Credit # field, enter the ID that you want to apply to the credit memo. Note: You may want to
connect the application amount to the credit memo. For example, if the existing invoice number is
106, you may want to type 106-C to indicate that the credit memo is applied to the invoice.
4. If the transaction date is different from the one displayed, enter or select a new date.
5. The Vendor Credit Memos window has two tabs: Apply to Purchases and Apply to Invoices. Do one
of the following:

 you enter it on the Apply to
If the credit is issued on a purchase without an invoice,
Purchases tab of the Vendor Credit Memos window.

If the credit is issued on an existing
invoice, you enter the credit on the Apply to Invoice tab of
the Vendor Credit Memos window.
6. When finished, select the Save button to save the transaction.

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Chapter Seven
Inventory System

7.1) Introduction
Peachtree tracks the inventory items you buy and sell, and automatically updates the quantities
after each posted transaction. It also allows you to store items you do not stock, but that you enter
on invoices. This makes entering invoices faster for you. Tracking inventory in Peachtree is
basically a three-step process:
  
Enter the item information, including sales, inventory, and cost of sales accounts.


Use item codes when entering purchases and sales. Peachtree computes and tracks costs and
quantities on a daily basis, based on transaction date.
 
Enter inventory adjustments if necessary.

Peachtree does the rest, adjusting inventory levels each time you post a purchase or a sale of an
inventory item. In addition, Peachtree can track the cost of each item on a daily basis, based on
the transaction date. Should I use inventory if I don‘t need to track costs or I only sell services?

In addition to tracking costs and quantities, using inventory makes entering transactions easier.
Through Maintain Inventory Items, you set up the goods and/or services you sell. You can set a
unit price and the account to be adjusted by the sale of this commodity. Then, when you enter the
sale, you need only select an inventory item, enter a quantity ordered, and Peachtree computes
the total. The inventory item description and any detailed description print on the invoice.
Peachtree has four different types of cost methods for inventory:
  
Average Cost
  
LIFO (last in, first out)
  
FIFO (first in, first out)
 
Specific Unit (Peachtree Premium only)

Once you select a costing type for an item and select Save, you cannot change it. Therefore, if
you want to change the cost method for an item with posted transactions, you must enter the item
again in Maintain Inventory Items and select the new costing type. Generally, your inventory
should all use the same costing method. Check with your accountant about the implications of
selecting an inventory costing method.

7.2) Entering Inventory Items Default

Default information is information that automatically appears in windows, or is automatically
used by the system. In the Inventory Item Defaults window, you establish the defaults for custom
field titles, taxes, general ledger link accounts, cost methods, and shipping methods. To open the
Inventory Item Defaults window, do the following:

From the Maintain menu, select Default Information. Then choose Inventory Items.
Peachtree displays this window.
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When you set up a new company, some of the information in Inventory Item Defaults is entered.
You can change these defaults if you like. There are several areas where you define default
information for inventory items. These areas are discussed below:

 or not to allow items to share UPC/SKU (Universal Product
General. This lets you choose whether
 Code/Stock Keeping Unit) values.

 Ordering 
.This lets you set a number of options that determine how Peachtree handles general
inventory situations, including

General Ledger Accounts and Costing Methods. Here, you set the most common general
ledger accounts for different item types, the most common costing method, and the default
freight account. The information you enter here  automatically appears when setting up
inventory items, thereby speeding up the process.
  
Sales accounts are typically income-type accounts for all item classes.
  
Inventory accounts are for stock and assembly items.
  
The other item classes use a Salary or Wages Expense type account.
 
Cost of Goods is Cost of Goods Sold type accounts.
Fields that are gray are inaccessible. You cannot enter general ledger accounts for Description
Only items, because no accounts are entered or tracked for this item class. You can only enter
costing methods for Stock and Assembly items, since we only track costing for those item
classes. You should use the same costing method for all items.
You need to enter the general ledger default account for Freight charges on Quotes, Sales Orders,
and Sales Invoices. This account will be used every time you enter the Freight field on Sales
Orders and Invoices. Usually the account selected should be an expense or cost of sales account
depending on how you handle freight (for example, Freight Expense or Shipping Charges Cost of
Sales).


Taxes and Shipping. To set up default tax type categories and shipping methods for your inventory
items, select the Taxing/Shipping tab.
An item can be taxed or it might be exempt. You can use item tax types to identify these unique
categories.

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The shipping methods you enter appear in the Ship Via list, which displays on appropriate
transaction windows. You can also select from these default shipping methods when setting up
your customers and vendors.

Custom Fields. Peachtree allows you to customize item information with five blank fields.
You can customize some reports to use these fields. Here, you are entering the label or name
 appear in Maintain Inventory Items, where you will enter the actual
of the field. The field will
data stored by the field.

Price Levels. Price levels offer you a way to charge different prices to different customers.
For example, a regular customer who buys large quantities of an itemmay get a better price
than the occasional customer who only buys one of those same items.

7.3) Setting Up Inventory Items

You set up your inventory items through the Maintain menu. You can establish general ledger
accounts, usual vendors, tax types (exempt reasons), sales price levels, and reorder quantities. To
open the Maintain Inventory Items window, do the following:

From the Maintain menu, select Inventory Items. Peachtree display Maintain Inventory Items
window.

Inventory item information is divided into six areas: Header fields, General tab, Custom Fields
tab, History tab, Bill of Materials tab (for assemblies only), and Item Attributes tab (for master
stock and substock items).

Header Information. On  the different tabs, the top portion of the information stays the same. This is
called header information.

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In the header fields, you can enter a new inventory item and description. You can also choose
whether to make the inventory item record inactive or not. In addition, there are a number of item
classes to choose from. This field determines what gets tracked for the item. It also allows you to
indicate if this item is subject to commission.


General. Information on the General tab includes a separate description to be used for
purchases or sales, different sales price levels, the location of the item in your warehouse, and
the IDs of the preferred vendor and buyer for the  item. You can also specify general ledger
 accounts to update when the item is bought or sold.

 Custom Fields .Peachtree allows you to customize  inventory item information with five fields that
you create. You can add these five fields to reports.

 History. You can view informationabout the history of the selected item. This information is read-
only and cannot be changed here.

Bill of Materials. You can specify items as assembly items, and create a unit made up of
component items. These component items have to be created first before you can create the
 assembly. The bill of materials tells Peachtree what 
components make up the assembly, and
how many of them are needed for one assembly unit.

Item Attributes. You can set up master stock items, which in turn govern the creation of
substock items. Substock items share the attributes of the master stock item that creates them.
First you add a master stock item as you would an inventory item, entering its ID and

description. Then you add both primary and secondary attributes for the item. Item attributes
could include size, length, color, price range, and so forth.
7.4) Enter Beginning Balances for Inventory
Use this procedure to enter inventory beginning balances for stock items and assemblies. This
establishes the quantity on hand of items when you started Peachtree.
1. Do one of the following:
  
From the Maintain menu, select Inventory Items.

 
From the Maintain menu, select Setup Checklist. Under the Inventory Items
heading, click the Inventory Beginning Balances setup option.
Click the Inventory Items icon on the Inventory Navigation Aid.
Peachtree displays the Maintain Inventory Items window.
2. On the General tab, select the Beginning Balances button. Peachtree displays the
Inventory Beginning Balances window.
 3. From the item list, enter or select an item ID that you want to record a beginning balance.

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4. For each item, enter two of the three fields: quantity (on hand), unit cost, and total cost.
Peachtree will calculate the third or remaining field.
5. When finished entering beginning balances for all your inventory items, select OK.

You can modify the beginning balance whenever you like, until you close the fiscal year. Once
you close the fiscal year, you can no longer change beginning balances for any item that was used
in any transaction in the closed year. You could, however, do an inventory adjustment on the first
day of period one. The total amount of your inventory beginning balances entered here should be
the same amount you entered in your Chart of Accounts beginning balance for Inventory. If you
don‘t do this, your general ledger and financial reports will not match your inventory reports.

7.5) Inventory Adjustments

Occasionally, you may need to record adjustments to on-hand quantities of inventory items. This
might be due to faulty records, pilferage, spoilage, or inventory change. The Inventory
Adjustment task makes it easy to make these adjustments, and to track them. There are two types
of inventory adjustments: increases in quantity and decreases in quantity.

For an adjustment up, enter a positive quantity; you can also enter a unit cost. This will
increase your quantity on hand and total inventory value much as a purchase would. You
  miscounted your inventory and now have more
might use an adjustment up if you previously
units on hand than you thought you had.

For an adjustment down, enter a negative quantity; you can‘t enter a unit cost. Peachtree
will figure out the cost value that these units are being removed at, much like a sale. An
inventory adjustment down will decrease the quantity on hand as well as the total value. You
might use an adjustment down if something was stolen, for breakage, or if inventory was
previously miscounted.

When you make an adjustment, the cost of goods sold, inventory total value, and inventory
general ledger accounts are all updated. The Inventory Adjustment window below shows
adjustment down for an inventory item (Product B) of one fictitious company.

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Chapter Eight
Account Reconciliation
Peachtree reconciles the selected G/L account against your monthly statement. You can reconcile
any general ledger account in Peachtree. Typically, you would reconcile bank accounts, cash
accounts (such as petty cash), and credit card accounts. You should systematically reconcile
accounts each period so that you can quickly detect bank errors, match real-world data with
Peachtree data, and identify possible fraudulent activity.

To avoid fraud and quickly detect errors, strive to have your bank send statements toward the end
of a period or month. Then always reconcile your account as soon as it arrives. You can apply (or
clear) transactions in three different categories:
  deposits in transit
  outstanding checks

 
other outstanding items (such as General Journal entries)

8.1) Bank Reconciliation Statement

Peachtree allows you to reconcile any account in your chart of accounts. Typically, you would
reconcile bank accounts, cash accounts (such as petty cash), and credit card accounts. This unit
focuses on reconciling bank accounts.

What is a monthly bank statement?

Once in a month, the bank sends each depositor a statement and returns the canceled checks that
it has paid and charged to the depositor‘s account. The returned checks are said to be ―canceled‖
because the bank stamps or cancels, them to show that they have been paid. The bank statement
shows the balance at the beginning of the month, the deposits, the checks paid, other debits and
credits during the moth, and the balance at the end of the month.

Rarely will the balance of a company‘s cash account exactly equal the cash balance shown on the
bank statement. Certain transactions shown in the company‘s records may not have been recorded
by the bank, and certain bank transactions may not appear in the company‘s records.

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Therefore, a necessary step in internal control is to prove both the balance shown on the bank
statement and the balance of cash in the accounting records.

Bank reconciliation is the process of accounting for the difference between the balances of cash
according to the company‘s records and the bank‘s record. This process involves making
additions to and subtractions from both balances to arrive at the adjusted cash balance.

―What factors caused the depositor‘s balance to be different from the bank‘s balance?‖
The cash balance indicated on the monthly bank statement seldom agrees with the cash balance
indicated by the depositors ledger account for cash because of the following reasons:
a. Outstanding checks: are checks sent for payment to the bank but have reached the bank
too late to be included in the monthly bank statement.
b. Deposit in transit: are checks sent for deposit to the bank but have reached to the bank
too late to be included in the monthly bank statement. Outstanding checks and deposit in
transit are most common examples of transactions shown in a company‘s records but not
entered in the bank‘s records.
c. Bank debit memorandum: are deductions made by the bank which the depositor knows
of such fact only at the time the bank statement received. Examples include:

Bank service charge. Banks often charge a fee, or a service charge, for the use
of a checking account. Many banks have the service charge on a number of
  balance of the account during the month or the
factors, such as the average
number of checks drawn

Deductions for depositing ―NSF‖ checks. A check deposited by the
company that is not paid when the company‘s bank present it to the makers
bank. The bank charges the company‘s account and returns the check so that the
company can try to collect the amount due. If the bank has deducted the NSF
check from the bank statement but the company has not deducted it from its
book balance, an adjustment must be made in the bank reconciliation. The
depositor usually reclassifies the NSF check from cash to Account Receivable

because thecompany must now collect from the person or company that wrote
the check.

Miscellaneous charges. Banks also charge for other services such as Check
printing fee/charge, Collection fee, Payment of promissory note. The bank
 of each deduction including a debit memorandum with the
notifies the depositor
monthly statement.
d. Bank Credit memorandum: are additions made by the bank which the depositor knows
of such facts only when the monthly bank statement is received. Examples include

  sometimes serve as an agent in
Collection on behalf of the depositor. A bank will
collecting on promissory notes for the depositor.

 Interest Income. It is very common for banks to pay interest
 on a company‘s average
balance. Such interest is reported on the bank statement.
e. Errors made by the bank or depositor.

Note: You can only reconcile an account once per accounting period. However, you can
return to the Account Reconciliation window anytime during the accounting period to make
adjustments. Always reconcile an account before closing the fiscal year. You cannot reconcile an
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account with a bank statement dated in a closed fiscal year.

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Important: If you are using the batch method, post your accounts to the General Ledger before
you reconcile. This ensures that you are using up-to-date information.
Step I: From the Tasks menu, select Account Reconciliation. Peachtree displays the Account
Reconciliation window.

Bank reconciliation can be

prepared from the ‗task‘
menu.

Figure 8.1: Account Reconciliation

Step II: Enter or select the account you want to reconcile. To display a list of existing accounts,
type? In the G/L Account ID field, or select the Lookup button.
Step III: Enter the closing date from the bank or credit card statement as the Statement Date.
The statement date you select must be within the current accounting period.
Step IV. Enter the Statement Ending Balance (the ending balance amount included on the bank
statement) in the lower-right section of the window.

State the statement date. As of

when the bank reconciliation is
to be prepared?

Fill in the specific ‗cash‘

account number that the
reconciliation is to be made.

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Insert the bank statement‘s

ending balance on the

statement date in this box.
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What will be displayed when you select the cash account in Account Reconciliation
window?
When the account number of the ‗cash‘ account is selected in Account Reconciliation window

the system would display:


 All the payments and receipts on the depositor‘s record recorded in relation to that ‗cash‘ account
during the stated period of time; and

Uncleared deposits or withdrawals from the previous bank reconciliation; (these are items

identified as outstanding checks or deposits-in-transit while performing the most recent
(previous period‘s) bank reconciliation.

To reconcile, you enter the bank statement date and the ending bank balance. Then, you need to
clear transactions that are reported on the bank statement.
Which transactions are to be cleared? Transactions that are available to be cleared are listed in
two groupings: Checks and Credits, Deposits and Debits. For each transaction, reference
information such as check numbers, amounts, dates, and vendor/payees or descriptions are listed.


Checks are sorted by check number. To clear transactions, put a check mark ( ) in the first
column for deposits in transit, outstanding checks, or other outstanding items. See Figure 8.3
below. Note: Each time you clear a transaction, the difference is reflected in the Outstanding
Checks and Deposits in Transit fields.

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
Check mark ( ) in this
sense refers to a payment or
deposit being cleared; i.e.
treated by both the
depositors and the bank.

Step V: Entering Adjusting Entries

Select the Adjust button to enter adjusting journal entries the bank statement included but which
are not included in Peachtree's general ledger. (For further information Read 8.2 Recording
Adjustments)For example, you may have to add bank service or finance charges. Adjustments
are made in the General Journal Entry window. Once the adjustment is entered and saved, you
can close the General Journal Entry window and return to Account Reconciliation.

Note:
  If you entered adjusting entries, select the Clear check box next to each of these items.

When you have successfully reconciled the account (the unreconciled difference is zero if
 select OK to close the window. On how to enter
you do not have Beginning Transaction),
Beginning Transaction read Step VI.

Bank service charge and interest income, among other reconciling items, can be entered as
follows:

Entering service charges:

  In the Service charges box, enter any charges incurred by the account.
  In the Date box, enter the date when the charges were incurred.


 box, enter or select the appropriate service charge account to act as offsetting account for
In the Account
the charge.
When the current period is closed, this service charge information will be saved as a general
journal entry.

Entering interest income:

  In the Interest income box, enter any interest earned by the account.
  In the Date box, enter the date when the interest was earned.


 account to act as offsetting account
In the Account box, enter or select the appropriate interest income
for the charge. Do not choose the account you are reconciling.
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When the current period is closed, this information will be saved as a general journal entry. Select
the Clear check box next to each item that is included on the bank statement. You can also select
the All button to select all transactions as cleared. Or you can select the Range button to choose a
range of checks or deposits to clear.

Peachtree keeps track of how many transactions recorded in the general ledger are cleared, how
many are not, and the associated totals. When all transactions listed on the bank statement are
entered and cleared in Peachtree and outstanding transactions have been accounted for, the
unreconciled difference should be zero (0.00). If not, check the bank statement to make sure that
each transaction listed is also entered in Peachtree. For example, a service charge listed on the
statement may need to be entered in Peachtree.

Step VI: Entering Beginning Balances

By the time Peachtree accounting is started, there might exists reconciling factors considered
from the most recent bank reconciliation. These are usually, outstanding checks and deposit-in-
transits identified on the previous bank reconciliations and other factors that are not yet cleared
off when Peachtree accounting system is started. This may cause you to have an unreconciled
difference. These uncleared reconciling factors from the most recent bank reconciliation by the
time Peachtree accounting is placed operational can be entered as beginning balances from
‗Beginning Transactions‘ box.

Select the Beginning Balance

button to enter uncleared
reconciling factors from the most
recent bank reconciliation.

Tip: If you are interrupted during the middle of reconciling, select OK, and exit the window.
Later, while still in the same accounting period, you can resume where you left off. All your
cleared items and other reconciliation information for the account will remain. You can also
change accounting periods to edit previous account reconciliations, if necessary.

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8.2) Recording Adjustments

What if an item is found onto the bank statement but not on the depositor‘s record? Some
additions or deductions may appear into the bank statement which hasn‘t yet affected the
depositor‘s record. Such events (if found to be proper) may be recorded as an adjustment into
the depositor‘s record simultaneously while preparing the bank reconciliation. Therefore, adjust
the bank account only for the bank‘s debit memo, credit memo, and the depositor's error
identified. Other reconciling factors identified do not require adjusting the cash account. If you
need to make an adjustment, use the Adjust button at the top of the window; adjustments are
entered in the General Journal. From your study in Unit 3, you know that the General Journal is
used to enter those types of transactions that are not readily categorized in the Tasks menu.
Typical General Journal entries include chart of account beginning balances, depreciation, and
account transfers.

Entering adjustments can

be performed from the
‗adjust‘ toolbar of
‗account reconciliation‘
window.

When you select the Adjust button on Account Reconciliation window, the window shown below
will display.

This is the window entitled

‘additional transactions’
to follow in order to enter
adjustments on the ‘cash’
account as debit or credit
memos sent by the bank

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Therefore, here below you will see how to make adjustments for these three reconciling items:
Case I: Adjustments for Credit Memo. Credit memos are additions or deposits made by
the bank without the knowledge of the depositor. Hence, these will be recorded into ‗additional
deposits‘ section of the ‗additional transactions‘ window (see the window shown below).

Complete the adjustment by

clicking on ‗OK‘

Enter the credit memos into this

section indicating the GL account to
be credited. Don’t forget the ‘cash’
account under reconciliation would
be debited by default.

What next? After inserting the credit memos as an adjustment to the ‗cash‘ account, the
adjustments will be shown onto the ‗account reconciliation‘ window being unticked as they are

new deposits entered. Thus, this deposit should be cleared by placing a check mark ( ) into the
box parallel to it to indicate that it is a deposit processed into both the depositor’s and the bank’s
record.

Case II: Adjustments for Debit Memo. Bank debit memos to accompany the bank
statement indicate payments made by the bank without the knowledge of the depositor. Hence,
i i l
these will be recorded into ‗add iit iiona ll withdrawals‘ section of the ‗additional transactions‘
window. What next?

Complete the adjustment by

clicking on ‗OK‘

Enter the debit memos into this

section indicating the GL
account to be debited. Don’t
forget the ‘cash’ account under
reconciliation would be credited
by default.

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After inserting the debit memos as an adjustment to the ‗cash‘ account, the adjustments will be
shown onto the ‗account reconciliation‘ window being unticked as they are new payments

entered. Thus, these payments should be cleared by placing a check mark ( ) into the box
parallel to it to indicate these payments are considered both by the depositor’ and the bank.

Case III: Depositor‘s Error. In preparing bank reconciliation, another thing that should be
considered is any amount recorded differently by the depositor and the bank? If a given item is
recorded differently by the two parties, it is an indication that either of the parties has committed
an error. In such case, the first thing to be identified should be ‗whose error is it?‘ The error
demands adjustment from the ‗adjust‘ toolbar only when it is found to be the depositor‘s
error. Otherwise, the bank‘s error requires only notification; not of an adjustment.

8.3) Account Reconciliation Reports

Account Reconciliation reports detail the status of your bank accounts. When you display or
print a report, Peachtree displays the following three tabs:

Filter: Select the Filter tab to determine the data criteria for the reports you want to see or
 
print. For specific information about a particular report's filter options, select the report
from the list below.

  Fields tab to choose which data fields to include and where the columns break
Fields: Select the
on your report.

Fonts: Select the Fonts tab to set the font styles for the heading and body of the report.
 codes, such as the current period,
You can also have the titles of the report show special
today's date, an as-of date, and the company name.
Note: Some account reconciliation reports display direct deposit paychecks differently from
other transactions.

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Chapter Nine
Designing and Producing Financial Statements

9.1) Introduction
Peachtree comes with the following standard financial statements that provide financial
information on your company:

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 

Balance Sheet 
Cash Flow Report
Income Statement Statement Changes Report
 
Statement of Income and Retained Income for 2 Years Report

Earnings Income/Budget Report
 
Statement of Retained Earnings G/L Account Summary
You can print these financial statements or view them on your screen. If necessary, you can also
use these financial statements as templates for designing your own financial statements. You can
design statements manually or use the Financial Statement wizard, which provides an automated
approach to statement design. This chapter describes how to accomplish each of these tasks.

Viewing & Printing Reports and Financial Statements

Viewing a report & financial statement before printing lets you make sure that the information is
correct first, so that you don‘t waste time and paper.

9.2) Displaying a Report on the Screen

1. From the Reports menu, select the type of report (Accounts Payable, Accounts Receivable,
Financial Statements, and so on) you want to appear on the screen. Peachtree displays the
Select a Report window with your report area selected. The report list displays reports,
forms, or financial statements pertaining to the respective report area selected. There are
several report areas. You can switch among them at any time in this window. Selecting a new
report area displays a different list of reports.
2. From the report list, scroll down to select a report you want to appear on the screen.
3. There are two methods for displaying a report on the screen:

 
Double-click the specific report in the report list. Peachtree displays the report using the
filter, fields, and font options saved for the report. Or

Select the specific report. Then, select the Preview button in the top of the Select a
Report window. Peachtree displays the report Options window pertaining to the

report or financial statement. Enter the desired information, and then select OK.
Peachtree displays the report on the screen.
Note: For assistance on each report filter, select the Help button or press F1 when the
Option window is displayed.
4. To set print properties (such as page size and orientation) before printing a report displayed
on the screen, select the (Page) Setup button.
5. To print a report displayed on the screen, select the Print button.
6. To design a report displayed on the screen, select the Design button.
7. When finished viewing the report, select Close to return to the Select a Report window.

9.3) Displaying a Financial Statement on the Screen

1. From the Reports menu, select Financial Statements.
Peachtree displays the Select a Report window with the Financial Statements report
area selected. The report list displays reports, forms, or financial statements pertaining to
the respective report area selected.

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There are several report areas. You can switch among them at any time in this window.
Selecting a new report area displays a different list of reports.
2. From the report list, scroll down to select a financial statement you want to appear on the
screen.
3. There are two methods to displaying a financial statement on the screen:
  
Double-click the specific financial statement in the report list.

 
Select the specific report or financial statement. Then, select the Preview button in the top of
the Select a Report window.
4. Peachtree displays the report Options window pertaining to the financial statement. Enter
the desired information, and then select OK. Peachtree displays the financial statement
on the screen.
Note: For assistance on each report filter, select the Help button or press F1 when the
Options window is displayed.
5. To print a financial statement displayed on the screen, select the Print button.
6. To design a financial statement displayed on the screen, select the Design button.
7. To display alternate financial statement filter information, select the Options button. If
you change the financial statement options, you will be prompted to save the new report
when closing the report window.
8. When finished viewing the financial statement, select Close to return to the Select a
Report window.

Printing Financial Statements

Printing financial statements enables you to keep a hard (paper) copy of information stored in
Peachtree and to easily give copies to your accountant.
If you use batch posting and you haven‘t posted all transactions needed for a financial statement,
Peachtree will give you an opportunity to post before printing the financial statement.
  
From the Reports menu, select Financial Statements.


Select the financial statement you want Select the statement from the report list, and then click the
Print button.

9.4) Designing Financial Statements

While the standard financial statements that come with Peachtree will be useful in many
applications, you may want to create your own statements to meet special needs. When you do,
you have two options: 1) The Financial Statements Design window, which lets you manually
define the four main areas of the financial statement, and 2) the Financial Statement wizard,
which substantially streamlines this process.
Use the Financial Statement Design Window
Peachtree has a powerful tool called the Financial Statement Design window. With this tool,
you can create customized financial statements. Or, you can just tweak the existing financial
statements to make them fit your business better. Note: While the Financial Statements Design
window gives you more individual control over each aspect of the financial design process, it‘s
probably a good idea to start designing with the Financial Statement Wizard. That way, you‘ll
have a better grasp of the basic elements of a statement and how to put them together effectively.

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Once you learn how the wizard builds a statement, designing financial statements on your own
will become less of a challenge.

To customize an existing financial statement

You cannot design financial statements from scratch; but, you can customize any of the pre-
defined financial statements to meet your business needs. This feature has many formatting
options such as user-selectable fonts, customized headers and footers, and text alignment.
1. From the Reports menu, select Financial Statements. Then in the Select a Report
window, select the statement from the report list.
2. Select the Design button at the top of the Select a Report window to display the window
where you can design financial statements.
Note: You can also display the financial statement in design mode while it is displayed
on screen by selecting the Design button in the Report window.
In the Financial Statement Design window you have several options available in which
to modify existing statements. There are two areas in which to work: Header and Body
areas.
  
Each row has a button next to it that defines the row.

  tools. These assist in selecting and adding various
To the left of the design window are design
types of design elements (types of rows
3. To move a row, do one of the following:

To move a row up or down a single position in the series of rows, use the Up and
Down buttons. Just select the row button for the row you want to move. Then select
  row up one position, or select the Down button to move the
the Up button to move the
row down one position.

To move a row or rows multiple positions, select the corresponding row button(s)
with your mouse pointer; then select the Cut button. Now, with the mouse pointer,
  row button above which you want to insert the row(s), and select the Paste
select the
button.
4. To modify a row's properties, select the row button, or move your mouse pointer over the
row in the design window. Then, right-click your mouse to display the design menu.
You can change the font or row properties using this method. There are properties for
text objects, column objects, line objects, and total objects.
5. To delete any unwanted rows, select the row button for the row you want to remove, and
then select the Cut button.
Note: If you remove a row in error, you can restore it by selecting the Undo option from
the File menu or by using the keyboard shortcut CTRL+Z.
6. Select the Options button at the top of the Design window to display financial statement
options.
7. When finished selecting the form options, select OK to return to the Financial Statement
Design window.
8. When finished designing your statement, select Save. Enter or select a name for your
form and a description. Then, select OK.
Note: You cannot modify a standard financial statement (those included with Peachtree)
and save it to the same name. If you modify a standard statement, Peachtree will prompt
you to enter an alternate name.
9. Select Close to return to the Select a Report window.
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Peachtree displays the new statement in the report list within the Select Report window.

Use the Financial Statement Wizard

A ―wizard‖ automates a process that might prove complicated and time-consuming if done
manually. The Peachtree Financial Statement wizard walks you through the fairly complex
procedure of designing financial statements. At every point in the process, your design cho ices
are clear; you know exactly what effect each choice will have on the finished product. When you
begin designing your own financial statements, it‘s probably a good idea to start with the
Financial Statement wizard. That way, you‘ll have a better grasp of the basic elements of a
statement and how to put them together effectively when you work in the Financial Statements
Design window.
With the Financial Statement wizard, you design a new custom financial statement by choosing
an existing statement to use as template, then making changes to that template to suit your
present needs.

Copy a Financial Statement

Peachtree lets you design your own financial statements from the standard statements that are
included in the program. You can also copy financial statements from another company and use
them as your templates. Review the financial statement before you choose to copy from it. To do
this, select Financial Statements from the Reports menu, choose the statement you want to copy,
and print it or view it on the screen.
To copy a financial statement
1. Open the company in Peachtree to which you want to copy a financial statement.
2. From the Reports menu, select Financial Statements. Peachtree displays the Select a
Report window.
3. Select the Copy button. Peachtree displays the Copy Reports & Financial Statements
window.
4. Select the Source Company to copy from.
This is the company that contains the original financial statement. When you select a
source company, Peachtree displays a list of financial statements in that company.
5. Select financial statements from the drop-down list.
6. Select the financial statement you want to copy.
7. Type a name for the statement (for example, G/L Account Summary). You can also
include a description. The list only shows custom financial statements attached to the
company you chose in Step 4. To display standard financial statements in the list, select
the Include Standard Financial Statements check box.
8. Select Copy. The report is copied into your company report list under Financial
Statements.
Chapter Ten
Customizing the Peachtree Accounting for Payroll
Accounting to Ethiopian Payroll System
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Introduction
Peachtree automates your payroll process. Once you set up payroll tax tables, employee defaults
and employee records, you only have to select each employee using the payroll tasks, and
Peachtree automatically computes the paycheck. Then, you can print a batch of checks for all
employees or print a single paycheck, if you like. The payroll process in Peachtree Accounting
involves the following five steps:
1. Completing Payroll Setup Wizard
2. Maintaining Payroll Tax Tables
3. Entering Employee Default Information
4. Maintaining Employee Personal Records
5. Completing Payroll Tasks

10.1) Completing Payroll Setup Wizard

Completing the payroll setup wizard process helps you to establish standard payroll fields, default general
ledger accounts and other optional payroll fields such as employee vacation time tracking. Note, however,
that all the procedures in the payroll setup wizard may not necessarily have impact on the Ethiopian
Payroll System (EPS). Nevertheless, it is not possible to handle transactions and data related to the EPS
using payroll facilities of Peachtree Accounting Complete Software Packages (PACSP) without passing
through or completing all the procedures making up the Payroll Setup Wizard. The following steps help
you to complete the Payroll Setup Wizard.

Initial Payroll Setup

1. From the Maintain main menu, select Default Information, and then choose Payroll Setup Wizard.
2. In the Payroll Setup Wizard window, select the next button or select the Initial Payroll Setup option,
and in the Initial Payroll Setup folder

 the drop-down list a state abbreviation for the state where in majority of your
Enter or select from
employees work.
  
Enter or select a locality and locality tax rate if the fields are available and applicable.
  
Enter the unemployment percentage the state government requires your company to pay

Select Yes to create payroll fields for employee tips and meals, otherwise select No.
Although the aforementioned procedures do not affect the EPS, you cannot pass to the next steps
particularly without selecting any one of the states from the state drop-down list and specifying
general ledger accounts to be used by Peachtree in setting up basic payroll fields. Therefore, it is a
 must 
to select one from the available states and enter the appropriate GL accounts in the boxes
available as given in step-iii below and after that you may escape the remaining procedures.
3. Select the next button and enter payroll default general ledger accounts to be used in relation to
standard payroll fields. Later you can establish accounts for specific pay rates and payroll fields, if you
want.

Gross Pay Account. Typically, this is the Salaries Expense or Wages Expense account which will
be used to record all kinds of payments to employees including basic salary, allowances, overtime,

 etc. Later you can set up individual expense accounts for each pay or salary type, if you want.
 For ZELALEM Retail Company-Salaries & Wages (Account ID-6000)

Tax Liability Account. This account will be used to record obligations of the employer for its
share of contributions in to employees‘
 pension/provident fund plan. This could be Pension or
Provident Fund Payable account.

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For ZELALEM Retail Company-Employee Income tax Payable (Account ID-2330)


Tax Expense Account. This account may be used to record expenses related to contributions by
 the employer in tothe employees‘ pension/provident fund plan. This is commonly the Payroll
Expenses Account.
 For ZELALEM Retail Company-Payroll Tax Expense (Account ID-6600)
4. The next steps in the Payroll Setup Wizard are not that much relevant to the EPS. Thus, unless
otherwise you want to know something about these steps, select the next button until the finish button
is enabled which helps you to finish the Payroll Setup Wizard. Note, however, that the steps related to
Vacation Time Tracking may be helpful to your company if it wants to track employee vacation time.

10.2) Maintaining Payroll Tax Tables

The maintain company payroll tax tables window enables you to create a new tax table or modify an
exiting one which will be used to determine amounts related to particular payroll field such as employee
income tax and employee/employer pension/provident fund contribution. Procedures For Maintaining
Income Tax Table (Income tax, pension and Overtime)

Entering Income Tax Rates

File → Payroll tax table → user Maintained →user maintained payroll tax table window appears
  Tax ID: Eth Tax
  
Tax name: ETH Tax 11
  10 stands for the payroll year( 2011)
 Make a single space between Eth tax and 10
  
Filing statues: All statues
  
Appear on payroll tax Report: Leave this blank (do not put a check mark)
  
Government: Federal
  
Type: Deduction
 
Formula: ANSWER = – Table (Adjusted _Gross)

Click the Table button on the tool bar and enter the following on the coming
window Withholding tax percentage Table Entry
Gross More Than Withhold Plus%
150.00 0.00 10.00
650.00 50.00 15.00
1400.00 162.50 20.00
2350.00 352.50 25.00
3550.00 652.50 30.00
5000.00 1087.50 35.00

Entering Pension:
In the same window, enter pension 8%( employees‘ contribution)
  Tax ID: Pens8
  
Tax name: Pens8 10
  
Filing statues: All statues
 
Appear on payroll tax Report: Leave this blank (do not put a check mark)

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  Government: Federal
  
Type: Deduction
  
Formula: ANSWER=–0.08*(Gross)
Then Save.
In the same window, enter pension 10 %( employer‘s contribution
  Tax ID: Pens10
  
Tax name: Pens8 10
  
Filing statues: All statues
  
Appear on payroll tax Report: Leave this blank (do not put a check mark)
  
Government: Federal
  
Type: Deduction
 
Formula: ANSWER=-0.10*(Gross)
Then Save.

Entering Overtime rate (This is entered after default information is created for DT,
NT, RT and HT in step 3 below)
In the same window, enter overtime rates
  Tax ID: OT
  
Tax name: OT 11
  
Type: Addition
  
Formula: ANSWER=(Gross/160)*((DT*1.25)+(NT*1.50)+(RT*2.00)+(HT*2.50)
Then Save.

10.3) Entering Employee Default Information

Once you have completed the Payroll Setup Wizard (or copied employee defaults from an existing
company in the New Company Setup wizard), you can modify payroll setup to match your business‘s
specific payroll needs. The information on the Employee Defaults window displays standard employee
information that will be considered during payroll entry. You can also modify individual employee records
for unique setup, if necessary, while maintaining employee personal records in the Maintain
Employees/Sales Reps window.

The following steps, broken up by tabs/folders help you to setup employee default information.
  
From the Maintain menu, select Default Information, and then choose Employee
  
Entering general information in the General Folder Tab
  
Click W-2s and select None from all boxes, and click OK
  
Click EmployeeEE Paid Taxes and select None all boxes, and click OK
  
Click EmployeeER Paid Taxes and select None all boxes, and click OK
  
Entering information in the Pay Level Folder Tab
 
Click this Tab, under the salary Pay levels enter the following
Field name GL Account
1 Basic Salary 6000
2 Overtime 6010
3 Allowance-T 6020
4 Allowance-NT 6030

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  Entering information in the EmployeeEE Folder Tab

 appear under Field name. GL Account, Calc, and Tax Name, However
Delete existing records that
Gross can not be deleted.

After deleting the existing records, enter items that appear on the payroll register such as the
 Basic salary, over time, 
Allowance, Income tax, 4% pension and other Deductions with their
respective GL accounts.

 Put a check mark under Calc column only for those that the amount is calculated by the program
(Income tax and pension in our example).

 to be deducted uniformly
Under the amount column, enter -10( union fee), an amount that is assumed
from all employee( the negative is used to show that it is a deduction)

For ZELALEM Retail Company in the EmployeeEE Folder Tab enter information as indicated
below
GL
Field Name Calc Tax name Amount Memo Run Adjust
Account
Basic Salary 6000
Over time 6010  Click the box,
use the look
up button &
select the Tax
name OT
Allowance-T 6020
Allowance -NT 6030
E. Income Tax 2330  Click the box, Click Adjust: in the Clac
use the look Adjusted Gross Window,
up button & under Use column put a
select the Tax tick mark only on taxable
name Eth Tax earnings the OK
Pension8% 2350  Click the box, Click Adjust: in the Clac
use the look Adjust Gross Window,
up button & under Use column put a
select the Tax tick mark only on Basic
name Pens8 Salary & Gross, the OK
Union Fee 2370 -10
Credit A. 2360
DT 
NT 
RT 
HT 
Note: Maintain Overtime rate

10.4) Maintaining Employee Personal Records

The Maintain Employees/Sales Reps window helps you to store personal information associated with each
and every employee and/or sales representative (rep) of your company. You can use this window to add a
new employee record and/or modify/delete an existing employee record.

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Payroll Data: The Company has four employees. It contributes 10% and the employees
contribute 8% for provident fund. The company expects to work 40 hrs per week. The data for the
month of April are presented as show below. All employees worked what is expected of them
during the month.

Basic Taxable Non- Taxable

ID Name salary Allowance Allowance OT hrs worked
K-001 Kelbesa Gemechu Br3200 400 Br200 8 Hours (RT)
S-002 Selam Abebe 4000 500 300 10 Hours (DT)
T-003 Tsehay Alemu 1600 200 150 6 Hours (HT)
Z-004 Zenebe kebede 2400 200 250 8 Hours (NT)

Additional Information:
  
Tsehay is not a permanent employee
  
Union fee of Br 10 is deducted from permanent employees in each month
 
Br 300 is deducted from Selam for credit association

Required:
A. Enter relevant information for each employees
B. Prepare Payroll Register

From Maintain Menu open the Maintain Employees/Sales Reps window, then enter
relevant information for each employees as shown below.

1. Entering Data for the first Employee: KELBESA GEMECHU

 Employee ID: K-001
Name First MiddleLast Name
KELBESA GEMECHU
  
Select (Click On): Employee
  
Click Pay Information Folder Tab
  
Pay method: Select Salary
  
Frequency: Select Monthly
 
Salary rate: 3200
Field name StdGL Account Salary Rate
Basic salary  6000 3200
i
Note: here the in Std column the―T iickMark ― is removed only if there is a need to change the GL account
No. otherwise, do not remove it.

Click EmmployeeEE folder Tab and enter Overtime and Allowance Amount:
  
Click the Tick Mark under Std column, in line with Allowance T, enter 400 in the amount column
 
Click the Tick Mark under Std column, in line with Allowance NT, enter 200 in the amount column

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  Click the Tick Mark under Std column, in line with WT, enter 8 in the amount column 
 
Click save

Field Name Std GL Account Calc Tax NameAmountMemoRunAdjust

Allowance T click 6020 400
Allowance NT click 6030 200
WT 8

2. Entering Data for The second Employee: SELAM ABEBE

 
Employee ID: S-002
NameFirst MiddleLast Name
SELAM ABEBE
  
Select ( click on ): Employee
  
Click Pay Information Folder Tab
  
Pay Method: Select Salary
  
Frequency: Select Monthly
 
Salary rate: 4000
Field name Std GL account Salary rate
Basic salary  6000 4000
Note: here the in Std column the―TickMark ― is removed only if there is a need to change the GL
ii
Account No. otherwise, do not remove it.

Click EmmployeeEE folder Tab and enter Overtime and Allowance Amount:
 Click the Tick Mark under Std column, in line with Allowance T, enter 500 in the amount
Column.
Click the Tick Mark under Std column, in line with Allowance NT, enter 300 in the amount
Column
Click the Tick Mark under Std column, in line with Credit Association Payable, enter 300
in the amount column
Click the Tick Mark under Std column, in line with DT, enter 10 in the amount column
Click save
Field Name Std GL Account Calc Tax Name Amount Memo Run Adjust
Allowance T click 6020 500
Allowance NT click 6030 300
DT 10

3. Entering Data for the third Employee: TSEHAY ALEMU

 Employee ID: T-003
First MiddleLast name
Name
TSEHAY ALEMU
  
Select ( Click On ): Employee
  
Click Pay Information Folder Tab
  
Pay Method: Select Salary
  
Frequency: Select Monthly
 
Salary Rate: 600
Field name Std GL account Salary rate
Basic salary  6000 1600

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i
Note: here the in Std column the―T iickMark ― is removed only if there is a need to change the GL
account No. otherwise, do not remove it.

Click EmmployeeEE folder Tab and enter Overtime and Taxable Allowance Amount:
 Click the Tick Mark under Std column, in line with Allowance T, enter 200 in the amount
column

Click the Tick Mark under Std column, in line with Allowance NT, enter 150 in the amount
column

Click the Tick Mark under Std column, in line with HT, enter 6 in the amount column

Click save

Field Name Std GL Account Calc Tax Name Amount Memo Run Adjust
Allowance T click 6020 200
Allowance NT click 6030 150
HT 6

4. Entering Data for the fourth Employee: ZENEBE KEBEDE

 Employee ID: Z-004
NameFirst MiddleLast Name
ZENEBE KEBEDE
  
Select ( click on ): Employee
  
Click Pay Information Folder Tab
  
Pay Method: Select salary
  
Frequency: Select monthly
 
Salary Rate: 2,400
Field name StdGL Account Salary rate
Basic salary  6000 2400
i
Note: here the in Std Column the―T iickMark ― is removed only if there is a need to change the GL account
No. otherwise, do not remove it.

Click EmmployeeEE folder Tab and enter Overtime and Allowance Amount:
  
Click the Tick Mark under Std column, in line with Allowance T, enter 200 in the amount column

  
Click the Tick Mark under Std column, in line with Allowance NT, enter 250 in the amount column
  
Click the Tick Mark under Std column, in line with NT, enter 8 in the amount column
 
Click save

Field Name Std GL Account Calc Tax Name Amount Memo Run Adjust
Allowance T click 6020 200
Allowance NT click 6030 250
NT 8

10.5) Completing Payroll Tasks

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Payroll tasks include:

  
Payroll Entry - Entering and printing one paycheck at a time.

Select for Payroll Entry - This is a pay method that helps you to filter a group of employees you
 want to pay and process a  batch of paychecks at one time. It is the quickest and automatic way to
process payroll each period.

 Payroll Reports and Forms - This task helps you  to generate different payroll reports and forms including
payroll register which is important for the EPS.

Closing Payroll Year - Usually there is no need to close a payroll tax year exactly at the end of
each calendar year. If you want, however, you can do it by following the procedures in the Year-
End Wizard which is accessible by selecting the system option from the tasks main  menu. Once
payroll is properly set up, you have very little work to do for paying employees.

To prepare a paycheck for an employee, do the following

1. From the tasks main menu, select Payroll Entry…
2. In the Payroll Entry window,

 Enter or select the employee ID from the employee lookup list.  Once a valid employee ID has been
entered, the rest of the information is filled in automatically.
  
Specify the pay period or enter the pay date.

Verify the information that appears (amount of hours or salary, deductions and allowances, or
any other calculated amounts). If the information is correct, proceed to the next steps. It is in
the payroll entry window that you will be prompted a feedback consisting of a "beep" sound
followed by a written message - it could not find the tax table - which indicates that the
program is unable to find payroll tax table which it is required to use in calculating a certain
amount. So, some of the amounts you see in this window may not be correctly calculated. When
you face with such feedback, go to the Maintain Company Payroll Tax Tables window to make
  table which the program is not able to find. Check for
sure that you correctly entered the tax
the single space and tax year rules.

Click the Save button to save theevent. All payroll transactions will be posted both to the general
ledger and to the employee file.
  
Click the Journal button to see how the payroll amounts are to be journalized.
  
Click the Print button to print the paycheck.

Click the New button to preparepaychecks for another employee or the Close button to finish the
process of preparing paychecks.

If you want to pay a group of employees in one batch, do the following;

1. From the tasks main menu, choose the Select for Payroll Entry… option
2. In the Select Employees - Filter Section window


Select the Pay Frequencies (weekly, monthly etc.) and Methods (salary or hourly) to be included in
the pay process.
  
Select the employees to be treated in the pay process (e.g. all or some of them).

 
If you want to prepare paychecks for some of your employees, put a check mark in the Form option
and select group of employees from the drop-down list.

 Finally, click Ok to go to the Select Employees to Pay window where you cansee list of employees
to be paid including employee gross and net pays related to each employee.

If you want to see the details of payments for an employee and check for their accuracy,
 select the employee nameand click the Detail button at the top row of the Select
Employees to Pay window.

Finally, click Ok to leave the Select Employees to Pay - Detail window and go back to the
Select Employees to Pay window where in you may select the Print button to print pay
checks and click the close button to finish the process of preparing paychecks.

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To design and view Payroll Register, do the following

1. From the Reports main menu, select the Payroll… option
2. In the Select a report window
  
Select payroll from the report area and select payroll register from the report list

To design/redesign the format of, view and print the payroll register, click the design,

preview and print buttons, respectively, available at the top of this window and complete
the necessary procedures therein.

To close Payroll Tax Year, do the following

Peachtree refers to the payroll tax year as the calendar year in which payroll transactions take place.
Peachtree keeps two years of payroll activity open at one time. As a result, there is no need to close a
payroll tax year exactly at the end of each calendar year. For example, if 2000 is the first of two fiscal
periods, you do not need to close this payroll tax year until the end of 2001. On the other hand, if 2000 is
the second of the two payroll years, you must close the 1999 payroll tax year before you can enter 2001
payroll transactions. It is highly recommends that you wait to close the first payroll tax year until all
payroll reports and related data are finalized, may be up to the first quarter of the second payroll tax year.
If there are mistakes in employee earnings and/or other related data, you will have the opportunity to
correct them. To close payroll tax year, follow the procedures you will be prompted by the Year-End
Wizard which is accessible by selecting the system option from the tasks main menu. The Year-End
wizard prompts you for completion of any uncompleted year-end tasks. The wizard will remind you to
print any journals, reports, payroll checks and forms you may have neglected to print. It will also prompt
you to backup your data if you have not already done so.

Chapter Eleven
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System Security And Administration

11.1) Introduction
Peachtree provides several options that can maintain data security and deter users from
possible fraudulent activities. These include:
  
Company Users and Passwords
  
Controlled User Access Levels
  
Audit Trail
  
Account Reconciliation
 
Back up and Restore

Company Users and Passwords. Peachtree can allow custom access for different individuals.
You can set up user profiles (records) for each person who will be using Peachtree. Each user
record is set up with a user ID and password that will be required before opening and working
with company data. Setting up users also enhances security and personal accountability when the
use Audit Trail option is activated.

Controlled User Access Levels. You can set up user rights (control levels) to various program
areas of Peachtree. You can choose to allow users access to a complete program module (for
example, all System areas) or limit access to a specific system function (for example, Reports). In
Peachtree Complete and Peachtree Premium, you can limit access to a specific window (for
example, Sales/Invoicing).

Audit Trail. Peachtree has several methods to track information. For example, the General
Ledger, journals, reports, and financial statements can be used to trace transactions and balances
for audit purposes. However, if you want to track when an action is performed in your company
data, you can activate Peachtree's audit trail. This is a security option that logs when a person
enters data, maintains (edits) existing data, and removes data. Audit trail provides accountability
of users, deters users from fraudulent activity or mistakes, and tracks transaction history. The
Audit Trail report can trace fraudulent activity and other accounting adjustments you may not
know were completed.

If you intend to have Peachtree maintain an audit trail log, it is strongly recommended that you
set up users in your company. When the Use Audit Trail option is activated and user records are
set up and implemented, data security will be increased substantially. The Audit Trail report can
associate user IDs with each data and system activity performed as it occur, establishing personal
accountability.

Account Reconciliation. You can reconcile any general ledger account in Peachtree. Typically,
you would reconcile balance sheet accounts. For example, you can reconcile a cash account
against your monthly bank statement. You can also reconcile an accounts receivable account
against the Aged Receivables report or an inventory account against the Inventory Costing

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report. You should systematically reconcile accounts each period so that you can quickly signal
bank errors, match real-world data with Peachtree data, and detect possible fraudulent activity.

Back Up and Restore. It is important that you back up your company data on a regular basis and
store these backups in a separate, secure location. Backing up data allows you to record a
snapshot of the current state of your company. If you suspect fraudulent activity or your data
becomes corrupt, you can restore a recent backup. Backups are also useful for auditing purposes.
For example, you can restore a backup that was made prior to closing a fiscal year to examine
detailed transaction history.

11.2) Set up User Records and Passwords

Peachtree Accounting allows custom access for different users. You can set up user profiles
(records) for each person who will be using Peachtree Accounting. Each user record is set up with
a user ID and password that will be required before opening and working with company data.
Setting up users also enhances security and personal accountability when the Use Audit Trail
option is activated. Audit Trail is available only in Peachtree Complete.

You can set up user rights (control levels) to various program areas of Peachtree Accounting.
You can allow users access to a complete program module (for example, all System areas) or
limit access to a particular system function (for example, Reports). In Peachtree Complete, you
can also limit access to a particular window (for example, Sales/Invoicing).
In order to implement data security and password protection, you must set up user records. When
user IDs and passwords are set up, Peachtree prompts you for a user ID and password when you
open a company. If you know the password, you can access the areas of the program to which
you have rights.
 From the Maintain menu, select Users. Peachtree displays the Maintain Users window.
The first time you access the Maintain Users window, Peachtree displays a security
message that introduces you to user records and passwords. Select OK to display the
 Maintain Users window.
Note: If you do not have access to the Users option in the Maintain menu, then your user
profile does not have privileges to set up or maintain user records/passwords in this
company. Check with your system administrator, or open the company using a user ID
and password that has this privilege.

To set up the first user record (system administrator)

In order to use user/password security in Peachtree, you must first set up a user record with the
Access to 'Maintain Users' option selected. Typically your first user should be an administrative
user with full rights to each area of Peachtree and the ability to set up and maintain user records
and passwords. Because of this Peachtree initially disables the Access to 'Maintain Users' and
Inactive options.
1. Enter a user ID (for example, Admin) and its corresponding password.
2. Select the control level for each program area for this user. Depending on the program
area selected, choose No Access, Read, Add, Edit, or Full control rights.
Tip: To quickly establish an administrative user, select the Full Access control level for
each program area listed in the Summary tab.
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3. When finished setting up the user record, select Save.

To enter additional user records

1. Select the New button.
2. Enter a user ID and its corresponding password.
Note: Passwords are case sensitive and must be unique. Two or more users cannot have
the same password.
3. If this user will be allowed to establish data security and modify user records, select the
Access to 'Maintain Users' check box.
Note: Peachtree strongly recommends that you have only one (administrative) user
with access to the Maintain Users window. This will prevent multiple users from
accessing other user passwords, changing user records, or inadvertently erasing user
records.
4. If you do not want this user to gain access to company data at this time, select the
Inactive check box.
5. Select the control level for each program area for this user. Depending on the program
area selected, choose No Access, Read, Add, Edit, or Full control rights.

User Rights and Limited Access

To expand the list of program areas in the grid, double-click the triangle to the left of the program
area. If you change a specific (secondary) program area control, then the primary program area
will display Detailed Selection as its control level.

Tip (possible only in Peachtree Complete): To quickly establish a single control level for a
primary program area, select a control level in the Summary tab. For example, to assign rights to
all accounts receivable areas of Peachtree, select the Summary tab and select Full Access control
level in the Sales program area.
6. To establish the user record, select Save.
7. When finished setting up company user records, select Close.
Any changes you make, including changes to your user personal record, will take effect the next
time you open the company.

Important: If you forget your user ID or password, you will not be able to access the company
data. It is your responsibility to maintain user IDs and passwords. It is critical that you write
down your user ID and password and file it away in a secure place. Remember that user IDs and
passwords are case sensitive.
In the unfortunate event that you lose your user ID or password and no one else can open the
Peachtree Company, contact Peachtree Customer Support.

Log on to a Peachtree Company

If you have company users and passwords set up, you will be required to enter security check
information (a user ID and password) prior to opening your Peachtree Company.
1. Open the Peachtree Company from either the Startup screen or the Open Company
window.
If company users have been set up, Peachtree displays the Security Check window.
2. Enter the User ID.
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3. Enter the user's Password. Then, select OK.

When you enter the password, Peachtree displays it as asterisks (*****) for security reasons.
Remember that user IDs and passwords are case sensitive. Peachtree opens the company and
allows you access to the areas which you have rights.

Change a User's Password and Access Rights

You can create similar user records including program area control levels from a user ID that
you have already set up using the following method:
1. From the Maintain menu, select Users. Peachtree displays the Maintain Users window.
In order to access this menu option, you must log in to the Peachtree company with a user
ID set up with the Access to 'Maintain Users' option.
2. Enter or select the user ID you want to maintain. To display a list of existing user
records, type ? in this field, or select the Lookup button.
3. Change the user password , if necessary.
Note: Passwords are case sensitive and must be unique. Two or more users cannot have
the same password.
4. Select the Access to 'Maintain Users' check box if this user will be allowed to maintain
or edit user records.
5. Select Inactive check box if you do not want this user to gain access to company data.
6. Select the control level for each program area for this user. Depending on the program
area selected, choose No Access, Read, Add, Edit, or Full control rights.
7. When finished setting up this user record, select Save.
8. When finished setting up company user records, select Close.
Any changes you make will take effect the next time you open the company.

Copy User Information to a New User

Use the following procedure to create new user records with similar program area control levels
from existing user IDs.
1. From the Maintain menu, select Users. Peachtree displays the Maintain Users window.
2. Select the user record you want to copy. To display a list of existing user records, type ?
in this field, or select the Lookup button.
3. Highlight the user ID text and type over with a new user ID .
4. Change the new user's password .
Note: Passwords are case sensitive and must be unique. Two or more users cannot have
the same password.
5. Save the new user record.
You can now change information for the new user.

Remove User and Password Security

Erasing all company user records will no longer display the Security Check (log in) window
where you must enter a user ID and password when opening the company. In Peachtree
Complete and Peachtree Premium, it will also remove user accountability if the Use Audit Trail
option is selected in Maintain Company Information.
Note: Before removing user and password security, you should log on to the Peachtree company
as an administrative user (meaning you must have access to the Maintain Users window).
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1. From the Maintain menu, select Users. Peachtree displays the Maintain Users window.
2. Select each user ID from the lookup list, and select the Delete toolbar button. To display
a list of existing user records, type ? in this field, or select the Lookup button.
It is important that you first delete all non-administrative user records (those who do not
have access to the Maintain Users window) first. Then, delete administrative user records.

Note: If multiple users still exist and you attempt to delete the only administrative user
record with access to Maintain Users, Peachtree will prompt you with an error message.
You cannot delete the single administrative user record until all other user records are
removed.
Once you delete the last user record, you will not be prompted for a user ID and password
when opening your Peachtree company. Also, if you have the Use Audit Trail option
activated (possible only in Peachtree Complete and Peachtree Premium), activity will not
be associated with user IDs.

11.3) What Audit Trail Tracks

This feature is available only in Peachtree Complete Accounting and Peachtree Premium
Accounting.
When the Use Audit Trail option is activated in the Maintain Company Information window,
the following items are recorded (when applicable) with each activity performed while operating
in the Peachtree company:
  Date: System (computer) date of action
 Time: System (computer) time of action
  User ID: User ID (if available); otherwise, Peachtree displays "Not Available" 
 Action: Add, Change, or Delete
 Window Name (or System Function): Name of window where action occurred (for
example, Sales Orders) or name of system function implemented (for example, Unpost)
 Transaction ID: For maintenance records, the ID associated with the record; for tasks,
the ID associated with the transaction after change
 Transaction Reference: Reference number associated with the transaction after change 
 Amount: Amount of transaction after change 
 All the above items are recorded in the Audit Trail report.

Records include customers, vendors, employees, inventory items, and so on. Transactions
include quotes, sales orders, invoices, payments, general journal entries, inventory adjustments,
and so on.
These include
 adding records or transactions (when Save is selected)
  editing records or transactions (when Save is selected)
 deleting records or transactions (when Delete is selected)
  entering or maintaining record beginning balances (when OK or Save is selected)
 voiding checks and paychecks
 making payments in Cash Manager and Payment Manager

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Miscellaneous Actions
  reconciling accounts
  maintaining company information and options 
  maintaining and loading user-maintained and Peachtree-maintained payroll tax tables 
 importing data into the company
 adding transactions using Dynamic Data Exchange (DDE)

System Functions
 posting and unposting journals (Batch mode only) 
  closing the fiscal year
 closing the payroll tax year
 backing up company data (using the Backup option from the File menu)

Activate Peachtree's Audit Trail

This procedure is possible only in Peachtree Complete Accounting and Peachtree Premium
Accounting.

Peachtree includes an audit trail security feature that can log when a person enters new data,
maintains (edits) existing data, and removes data. Audit trail provides accountability of users,
deters users against fraudulent activity or mistakes, and tracks transaction history. The Audit
Trail report can trace fraudulent activity and other accounting adjustments you may not know
were completed.
1. From the Maintain menu, select Company Information. Peachtree displays the
Maintain Company Information window.
2. Select the Use Audit Trail check box and click OK.
If you have not set up user records with password protection, Peachtree displays a
message suggesting that you do so to personalize audit trail activity.

If you intend to activate Peachtree's audit trail, it is highly recommended that you set up user
records in the Maintain Users window. Peachtree can associate the user currently logged into the
Peachtree Company with the data that is being entered or maintained, thus providing a more
complete audit trail.

Note: If a company has activated audit trail and implemented password security, you should limit
access to the Maintain Company Information window to one or two users. This can prevent other
users from inadvertently removing audit trail functionality to ent er or maintain company data in a
fraudulent manner.

Print the Audit Trail Report

This procedure is possible only in Peachtree Complete Accounting and Peachtree Premium
Accounting. The Audit Trail report lists important information about each activity performed
while anyone is operating in the Peachtree company. It can trace fraudulent activity and other
accounting adjustments or errors you may not know were completed.
Note: The Use Audit Trail option must be activated in the Maintain Company Information
window before information will appear in the Audit Trail report.
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1. From the Reports menu, select Company. Peachtree displays the Select a Report
window.
2. Select the Audit Trail report, then select the Preview button (if you want to display the
report) or select the Print button (to print the report).
3. In the Filter window select a date range, then select OK. Peachtree prints or displays the
Audit Trail report on the screen.

Note: To personalize audit trail information, it is highly recommended that you set up user
records in the Maintain Users window. Peachtree can associate the user currently logged into the
Peachtree Company with the data that is being entered or maintained.
Tip: To display or print the Audit Trail report by user ID, select User ID as the Report Order
option in the Filter tab.

Chapter 12: Fixed Assets

  Recording Fixed Asset Acquisitions using the general journal

 
Recording Depreciation using general journal

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