Transactions in Suspense

A common situation in business is that the bookkeeper isn’t sure how to code a transaction but they need to enter it in order to complete a bank reconciliation or some other task. This person usually amends the coding after seeking advice from the business owner, accountant, or another person they report to.

If you find yourself in this position, you could use a temporary bank account that could be called Expense: Suspense (for example).

If it’s the account you aren’t sure about (eg whether it should be Expense:Office Supplies or Expense:Sundries), you could create and use a temporary account called Expense: Suspense (for example).

Accountants will often use an account like the one above for holding transactions that need to be finalised when more information is available. It’s normally used as a temporary coding measure and should be changed as soon as the verified information is available. Generally, it’s not a good idea to use these codings unless your accountant has explained the implications of doing this. Usually, an accountant’s workflow would include clearing these codings at the end of each accounting session, or at least by the next tax reporting period or financial year end.