Someone point me in the right direction

Kate989589

Okay, this may sounds a little ambitious, I'm not sure. My parents own a small business, my dad's a sole trader plumber. I have always known they pay their accountant alot on a yearly basis.
My mum does all the accounts, and does them in the most awkward way possible. She uses seperate programs to do everything. Microsoft works for Invoices, Spreedsheets for reciepts, Microsft Money for banking.. you get my drift.
Anyway, I've passed Level 2 and I was asking about her accounts and was horrified to discover that she litrally hands her accountant in November a huge pile of reciepts and statements for the year May 2010 - May 2011 and then starts another pile.
I wanted to help out, even if the only purpose it serves is that I get more practice at Sage. I have sage on my laptop, but where the hell do I start?
Obviously she has no trial balances so I can't enter opening balances, I have bank statements etc. I could probably find out the capital from the reports from her accountant last year.
Do I set the program date to finacial year this year and then enter all last years figures? or set the date for last year and work forwards? I have a P&L report from her accountant.
Any help or hints would be appreciated, sorry its such a long question

Kate

Monsoon

Kate,

Good for you! This is one of the best ways to start getting experience.

Start at the beginning of the first financial year that the accountant has not had. If she's handed 2010-11 over already, then start with 2011-12. Alternatively, if the accountant hasn't started 2010-11, you could ask for it back!

Start with the bank. When in doubt, always start with the bank.

Post the opening balance to the suspense account (or if you use the new bank wizard it will automatically do it) and the accountant will be able to move it when he does the final accounts. Do not worry about an opening TB; you can ask the accountant for it though - but some accountants might just say let them deal with knitting the new Sage file to their o/bals.

I would recommend phoning the accountant to discuss - it's never good when a client hands their stuff in for a year and you discover it's totally different and actually more complicated or that it would have been even better had they discussed it before changing how they did things.

Also, get one of your parents to confirm they will get reduced fees. Having the accountant do the bookkeeping is the easiest way to bump fees up so they should get a reduction.

Kate989589

Thanks, She already said to me yesterday that her accountant has said to her she could save alot of money if she did this herself, an explained to her how to do it but she lives in the dark ages, and says she has no idea how to do it. So she said to me if I could do it, whatever she saves in fee's from her accountant she'll happily take me shoe shopping with :P Not that THATs my sole motivation (no pun intended
She hasnt handed in 10-11 yet, she does that in November. So i have all last years paperwork and this years so far, so it's a bit daunting.

Monsoon

Great stuff!

Ok, so start with the first month in the 2010-11 year. Yes, there may be a lot to do, but once you get going, it won't seem so bad.

When I'm bookkeeping on Sage, my methodology is along the lines of:

Post all the sales invoices, then mark them as paid (from the paying in book).

Post the purchase invoices, then mark as paid (from the cheque book).

Then start your bank rec, and add in any sundry things like debit card purchases, bank charges, direct debits etc.

You could do one month like this and see how you get on.

Don't forget that in the first month or 2 you might get money in/out of the bank that relates to previous year purchases and sales - if you get o/bals from the accountant (which, given the dates you are dealing with, seems very possible) then you just post them against the brought forward debtors and creditors. Alternatively, what I've done in the past when I've not had o/bals is post to sundry debtors/creditors and mark it "Prior year creditor/debtor" so it's obvious. The apyments have to be in there so the bank will reconcile but obviously shouldn't go through the current year's P&L.

Enjoy the shoes :-D