The Grouped Deposits and Payments function provides a way to combine several separate receipt and payments transactions into a single bank entry.
This can be useful, for example, when you receive funds from Lawyer which has to be split into gross receipts less securities, legal fees etc, and you want each Payee/Payer to report separately while only having one entry to reconcile in the bank account.
Another reason for using groupedis to combine entries for differed payees into
I have set out a few alternatives methods of entry below so you can see the differences. The last method, Enter via Journal Entry, might be Catherine's preferred method but I would always tend to recommend the Grouped Deposit and Payments method.
Let say you had a fairly straightforward property realisation where the lawyer has paid the mortgage/agent fee etc and then forwarded the net proceeds on to you as per the below example.
|Mr Property Purchaser||Property Realised Gross||100000|
|ABC Lawyers||Legal fees||-7500|
|123 Agents||Agents fees||-5000|
|Proceeds to Liquidator||7500|
Enter via Bank Account
You could enter the receipt into your bank as a single transaction as shown below
The Receipts and Payments will report the same Payee for each component of the realisation as shown here, and you also do not have a separate distribution record to report on the 5602
Enter via Grouped Deposits and Payments
If you used the Grouped Deposits and Payments account you could enter each component as a separate receipts or payments entries as shown here.
1. A receipt to Group Deposits and Payments for the gross sale amount
2. Payments to Gross Deposits and Payments with the correct payee's as shown here
3 And a secured distribution also paid through Grouped Deposits and Payments as shown here
4. Finally, you can now transfer the net receipt of $7500 from Grouped Deposits and Payments, into the Bank Account as a single item to be reconciled in the bank
Below is how this will report on the Receipts and Payments, notice that it reports a different Payee/Payer for each component.
Enter via Journal Entry
I'm not sure either what the audit/compliance issues are with the above method of receipting funds, but there is also a journal method available.
Using the above example, but with legal fees of $15,000 so that the net receipt is $0.00, a journal could be entered as shown below, and flagged to be reported on the R&P reports.
This would be the resulting R&P
Hope this helps, but let me know if you need any further information.