Bookkeeping

lgarside

Hello, I am doing the bookkeeping for someone and I just wondered if you could offer some advice with regard to credit cards. Is it best to enter the receipts into the week they credited the bank or the previous week when the money was actually taken? The cheques are banked in arrears so I take the figure from the bank statement and record it in the previous week when the chq was actually received, but I'm not sure if the same rule should apply to credit/debit cards.

Claire321

Hi,
Previously I worked for a business where a lot of their income was by credit/debit cards. I set up a bank account on Sage called "credit cards" and used it as a control account. I would enter the receipts each day from the till records to this account, and then when the income was received into the bank, a few days later, I would transfer the money on Sage from the "credit card" bank account to the "current" bank account.

This way it ensures all the money taken by credit/debit cards is actually received into the bank, and also income is recorded on the day it is taken which makes reporting weekly, monthly sales easier.

lgarside

Bookkeeping

Thank You for the reply. I am using Simplex D account books. It's for a small hairdressing salon so no need for anything too complex. The previous bookkeeper used the bank statements to post all receipts and payments. But she was posting the credit cards to the week it appeared on the bank statement, however in the narrative it shows which day the previous week it actually relates to. I think after reading your response I will take the figure from the statement and post to the week it relates to like with the cheques.

Claire321

You could enter the sales as they occur, from the till records or whatever you have, on the date they occur, then reconcile the bank account when the entry appears on the bank statement, but it really depends on what records you have and the frequency you receive / have access to them.

In the example above, there were a large number of transactions and a need to check all payments were actually received.

lgarside

Bookkeeping

Thanks for the reply. I went home last night and had a look at the Simplex D book but it seems confusing even though I know it should be really easy!!!

If I had the below entries on the bank statement, would the 500 and 200 appear in the top receipts part of the book as turnover for the previous week ie week ending 17/10/09, or would they appear in the receipts part as the date it appears on the statement ie in the following week?

20/10/09 Cheques banked 500.00 (but relating to previous week)
19/10/09 Cards (16/10/09) 200.00
19/10/09 Chq cashed for stock -150.00

Also what goes into the paid to bank section, is this the cheques as when you bank them ie the cheques in arrears from the previous week or the cheques fig you have as a turnover figure for the current week. So in the above example would the cheques paid to bank figure for the week ending 17/10/09 be 500.00 or the figure of the cheques received the previous week?

Any help with the Simplex book would be greatly welcomed. The previous person doing them said the accountant just said to take all figures from the bank statement and I don't think they are particularly worried about dates, I guess the accountant just sorts it each year!!!

Monsoon

May I respectfully recommend you move to a simple computerised bookkeeping package? It might take a bit of a faff to get it set up but in the long run it will pay dividends.

The Simplex books are hideous and, as an accountant, I would flat out refuse to take on a client who kept their books in this way as they leave so much extra work to do at the year end and, personally, give me a headache!

Look at VT Transaction, or Solar Accounts, for example.

With regards your question, I would always say the books have to mirror the actual facts of what happened, so enter things on the dates they actually happened. However I seem to recall Simplex is a cash accounting system, not an accruals one, so they might be designed to take the dates from the bank.

I promise you a simple accounts package will make things SO much easier!!

Londina

lgarside wrote: »

Is it best to enter the receipts into the week they credited the bank or the previous week when the money was actually taken? The cheques are banked in arrears so I take the figure from the bank statement and record it in the previous week when the chq was actually received, but I'm not sure if the same rule should apply to credit/debit cards.

Sorry, but it's not easier just to wait the credit card statements and post the transactions as you may do with a typical bank statement? I use SAGE and there is a default "Credit Card" account in the Bank screen.

sheelagh

Credit card receipts

I'm not sure if this is true of all bank statements, but in my experience the narrative on the bank statement includes the day the credit card payment was taken.
If this is the case with your hairdressing client, post the transactions by reference to the bank statement, but record the card transaction date, not the date it appears on the bank statement.

lgarside

Bookkeeping

Thanks, yes the date appears on the bank as say 18/11/09 and in the narrative it says streamline 15/11/09 so I have been entering into the simplex book as the date in the narrative ie 15/11/09.

I assume I can do the same thing with the debit card payments - use the date that appears in the narrative next to the supplier and not the bank date.

I think the person doing it before me used the dates as they appeared on the statement, not the dates in the narrative but I just wanted to make sure (as I'm taking it over) that I'm doing it correctly.

With regard to cheques debiting the account, the person before me just used to record the payment on the date it debited the bank, but should I be using the cheque book and recording it as the date it was issued, as it could take a few months for a supplier to cash it so it's not very accurate to use the bank date?

I think I'm right in thinking the simplex books use cash accouting, but this means the date things were paid into/ out of the business and not the date it appears on the bank.

As long as I do a bank reconcilaition I think the accountant should be happy with this!?!