Setting a credit limit

Mikelunn_8292

Hi. I need to set a credit limit for my purchases from a specific vendor. How do I do this in wave?

Finn_Kingsland

Do you mean that you want to set yourself an alert or spending limit @Mikelunn_8292? To my knowledge Wave doesn't have budgeting tools like that. Do you need this as a safeguard for spending?

The expenses per vendor report allows you to keep track of that. That could help.

Mikelunn_8292

Hi. Yes. In essence the main supplier requires being paid 15 days from date of invoice. We are dealing with fresh meat here so the suppliers are very sticky about getting paid on time. I have negotiated (for my client) that they get paid only 2 x per month as the admin for payments is becoming onerous. So this will help with cash flow planning. In my 27 years experience as a SMME accountant, cash flow is one of the biggest problems for SMME's. I notice that there are terms in the customer setup, so I would think that this should be available for the vendor/supplier setup as well.

Alexia

Hi, @Mikelunn_8292.

Wave doesn't have budgeting tools like this one, but I can suggest a workaround. It's not an elegant one, and won't have an automated alert feature, but it would help you keep track of how much budget you have left for specific vendors. Here it is:

1. Go to your Chart of Accounts, create an Asset account called Total Vendor Spending Budget, and a liability account for each of your vendors, named "[Vendor's Name] Spending Budget".
2. When you set your budgets, create a journal entry for each vendor that debits your new Asset account, and credits that vendor's spending budget account.
3. When you enter a bill for one of your vendors, categorize the items on that bill to that vendor's spending budget liability account.

This will allow you to track how much budget you have left for a given account, you'll be able to find the amount on your balance sheet's detailed view. The number there is the remaining budget for each of those vendors.