| # The Smart Way To Buy Scrap
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| Transferring information to the General Ledger Scrap Dragon is an effective tool for purchasing scrap and maintaining the accounts payable subsidiary ledger. Certain information from Scrap Dragon should be posted into your General Ledger accounting system. It is important to understand how Scrap Dragon deals with transactions before looking at where one finds the amounts to enter into the General Ledger. Experience has taught us that mistakes are made and often not discovered until well after the fact. Scrap Dragon allows you to make changes in closed and paid tickets both on the day of the transaction and even on subsequent days. There are two circumstances which change the status of a ticket so that you may no longer edit it. The first is when the ticket was paid by check and the check has been recorded as cleared. The second is when the the payment was through the ATM machine and has been cleared by closing the ATM Machine drawer. Other than those exceptions, any ticket remains editable after it has been closed and even after it has been paid. It is vitally important to record purchases and payments into the G/L on a daily basis and to run the source reports at the end of every day. Reports run for a prior date will NOT be accurate for G/L purposes. Then, at the end of the month make an adjusting journal entry to reflect all of the adjustments that were made to tickets from a prior date. The reason for this will become clear as you learn more! The basic journal entries are as follows:
Daily Journal Entry | Debit | Credit |  | Daily Information from | Monthly Information from
To record PURCHASES (scale activity) |  |  |  |
Ferrous Scale purchases | XXXX |  |  | Purchases summary report or Shrunk/Unshrunk Report | Prior date ticket adjustments (summary or detail)
Nonferrous Scale purchases | XXXX |
| Accounts payable |  | XXXX
To record PAYMENTS (cashier activity) |  |  |  |
Accounts payable | XXXX |  |  | Cashier report | Prior date payment adjustments
| Cash payments |  | XXXX |  |  |
| ATM payments |  | XXXX |  |  |
| Checking |  | XXXX |  |  |
You may require a more detailed breakdown of purchases to match your g/l accounts. In this example, we would use the $Amount from the Purchase Summary report, which is found in the Back Office module, under Reports; Purchasing; Purchase Summary. If you prefer to record purchases by sell inventory item, the daily information can be found on the shrunk/unshrunk report by commodity. For the payments journal entry, use the Cashier report, which lists the totals paid on this date, from the different sources. This is simple, but a problem arises when changes are made to a previous days information. There is for example, no guarantee that if you print out a 'Purchase Summary Report' for July 10th on July 10th and then print out the same report on July 15th for July 10th that you will get the same figures. This is because you have the flexibility to change information on tickets after they are closed, or many days after you have received the scrap. For example, one of you biggest customers may bring in some scrap and you decide, when reviewing their tickets for payment, to give them a slightly higher price for one of the commodities you bought from them. The purchases report printed on the actual date they bought their scrap in will reflect the lower price, when you reprint the report it will reflect the higher price and there will be a discrepancy To handle this situation, the system provides 3 prior date adjustment reports, which track any changes made for prior dates, and provide you with the necessary information to make journal entries to correct your General Ledger accordingly. In the example above, the Prior Date Ticket Adjustment Details report, which is found in Back Office; Reports; Exception, Prior Date Ticket Adjustment Details shows how the price/GT was amended on a ticket. This increased the cost by $113.90, and you would need to make a correcting journal entry to your general ledger to reflect this change. There is also a summary version of the report which should suffice for creating the journal entries. Similarly, a report of adjustments made to payments from a prior date, such as voiding a check that was issued on a prior date, is required to be run and posted to the g/l at the end of the month. This report can be found in Back Office; Reports; Cashier; Prior Date Payment Adjustments. In summary, print out the reports required to do your General Ledger entries on a DAILY basis. Then, once a month, print out the adjustment reports and make the necessary adjustments to your ledger.