How Document-Led works
1. Capture and review documents
Upload or receive the source record, confirm whether it is Sales, Purchase or Expense, then review the extracted information. The accounting entry is based on the source document rather than inferred from a later bank payment.
2. Match customer and supplier settlements
When money moves through the bank, allocate it to the underlying customer/supplier items. Balansix should support partial allocations, one payment against several items and several payments against one item while preventing duplicate settlement.
For Cash VAT, VAT is released according to the allocated payment position rather than merely because an invoice exists.
3. Use bank-only coding only for confirmed missing documents
Use it after the client has confirmed the source document is missing/unavailable and the practice intends to treat the bank transaction as the available evidence. Do not create a later duplicate document posting for the same transaction.
4. VAT in Document-Led
Document-Led can support Standard VAT or Cash VAT according to client configuration. Flat Rate Scheme workflows can follow invoice or cash turnover logic where configured. Always follow the client’s actual VAT scheme and effective dates.
5. Reconcile the bank
Once postings and settlements are complete, the bank running balance should agree to the statement. A reconciliation is complete when the difference is zero and statement gaps/overlaps requiring resolution are cleared.