HELP - started in Practice and don't understand!

System

Hi

I have just started in pratice doing accounts prep etc, they assumed cos I had AAT that I knew what I was doing and regard me as second senior however I have not got a clue as AAT teaches you NOTHING relevant to accounts prep, mainly as most of it is to do with how you post things on accounts preparation packages.

Could anyone help me:

1. where on accounts preparation packages do closing debtors go when you reverse them out at the start of the next year, also closing creditors?

2. How do you treat VAT claimed in your last quarter relating to purchases after the year end in your VAT rec?

Simple questions I know but I have just gone completely blank and look a real idiot! :oops:

System

Re:HELP - started in Practice and don't understand!

If it is wrong to presume that AAT qualified people know what they are doing because and I quote "the AAT teaches you NOTHING relevant to accounts prep" then are you not making the same mistake as your new employers?

1) Closing debtors and creditors in one period become opening debtors and creditors in the next.

2) Likewise for VAT.

Run the year end procedure on the software package it should automatically take care of it; dependent on the software package you use.

System

Re:HELP - started in Practice and don't understand!

I think numbernumb is assuming an accounting package used in industry e.g. Sage rather than a practice accounts production system e.g. Iris.

When you do your debtors/creditors control reconciliation the opening debtors/creditors should clear themselves out by the activity that has taken place in the bank in the next year (i.e. the year you are doing). The prior year file should contain a debtors/creditors control account which will show how the balances have been arrived at and you can cross-reference this to the bank activity. You need to establish from the bank statements which items relate to debtors and creditors control and those that don't e.g. direct debits. Opening debtors and creditors would not normally get reversed to anything - they should be matched with payments and receipts in the next year.The prior year's VAT control account should also contain those items you are querying as a reconciling item. In an accountancy practice, control accounts form the backbone of every balance sheet account. I apologise for the lack of assistance, but you would need to refer to the prior year's file to do the control account reconciliation and use that as your template. If it is a first year then I would suggest you ask someone who can help you.

The AAT qualification does provide assistance in this respect. Have a look at FRA and DFS papers - you do debtors and creditors control accounts in those and they appear very, very frequently.

Please don't take this as any form of disrepect but I'm afraid, as a Senior, you may well be asked to deal with a lot more technical issues than the ones you have faced above.

It's better to ask (what you consider to be inferior) questions to your colleagues than to look stupid in front of the client. You won't be expected to know everything about your firms clients affairs to start off with - this is how you built up your own portfolio. As a senior, however, you will be expected to know about the issues you are struggling with above. If you feel you are struggling with the role then have a word with your manager - they would appreciate that more than you being made to look undermined in your role. They would also appreciate your honesty. Honesty in this profession speaks volumes.

Kind regards and good luck.

Steve

System

Re:HELP - started in Practice and don't understand!

Steve in relation to the above could you shown the closing T a/c for a debtor control a/c and then the opening T a/c for the debtor control a/c, or will it be the same e.g if you close an a/c with a debtor bal of 500.00 you then put a credit in to carry it forward and put on the year end bal sheet will it then open the next year with a debit of 500.00?

Many Thanks

System

Re:HELP - started in Practice and don't understand!

The closing balance on a T account for a debtors control account will c/f on the credit side and then b/f on the debit side as you have stated in the latter part of your query.

Debtors by their nature will always open with a balance on the debit side therefore closing in the prior period on the credit side in order for the T account to balance.

Kind regards
Steve

System

Re:HELP - started in Practice and don't understand!

Hi Lgarside,

Could you tell me what level you are studying?

Kind regards
Steve

System

Re:HELP - started in Practice and don't understand!

Thanks for the tips Steve, should have made myself clearer before re: the other poster. I was talking purely in terms of what the accounts production package is doing rather than debtors/creditors on the whole. Our system is playing up at the moment and putting things in the wrong bits and I am trying to correct it.

System

Re:HELP - started in Practice and don't understand!

What accounts production software do you use?

System

Re:HELP - started in Practice and don't understand!

The actual posting to the accounts is a foundation / intermediate level issue and by the time you complete technician you should understand this as it is the principle that everything else is built upon.

However, if you know the AAT principles of posting to debit/credit and balancing off accounts at year or period end, you shouldn't have to feel scared to ask your employer to provide you with some software training.

After all, the AAT teaches YOU how to do it, they don't show you how to make SOFTWARE do it for you.