Hanging in Suspense

Gregory Bingel — Thu, 28 May 2009 14:43:00 GMT

Some of you may be wondering what a suspense account is and why it is needed in The Financial Edge? Before we dive into the magical world of the suspense account you first need to determine if you're using a single AR Summary Account or multiple ones. This can be done by opening Accounts Receivable, Configuration, clicking Business Rules, and highlighting General. If you use a single AR Summary Account then there is no need to use a suspense account because applications default to ‘Do Not Post’. We will discuss applications a little bit later, but before we do that let’s talk a little bit about the mysterious suspense account.

A suspense account is nothing more than a doubtful receivable account. In The Financial Edge it is used to ensure the program maintains balancing requirements at all levels. The account temporarily houses received revenue until it is applied to an invoice. The suspense account should not contain a balance unless there is an unapplied payment application. If payments are never applied to a transaction, the balance in the suspense account continues to grow, and will not be reduced until the application is applied. When the payment is applied to something, an entry will be created to move the funds from the unapplied payment account to the selected AR account.

The table below shows the journal entries created when posting unapplied and applied transactions. If a payment is entered and applied at the same time, all four transactions will post to the General Ledger concurrently.

	Debit	Credit
Unapplied Transactions	Cash Account	Suspense Account
Applied Transactions	Suspense Account	A\R Account

I hope the above explanation helped to clear up any questions you have about the suspense account and its purpose.

The Ledger : suspense account

Hanging in Suspense