Please help me with Sage

Antoinnette
Antoinnette Registered Posts: 118 ? ? ?
I am doing the bookkeeping for a Charity and they use Sage. There are a few issues with the books from previous years. There is an opening balance of 2500 in one of the bank accounts which seems to have been a result of mistakes with clearing down opening balances when the software was first set up in 2010. They have left it on there for years but want me to get rid of it now. I am not sure how to o this. This bank account hasnt been reconciled since the initial entries either.

Also they receive income from some companies in the form of payment of their bills. I have thought of dealing with this by opening a bank account in the 1200s for the income and linking this to a restricted income code in the 4000s and then simply paying the bills from the bank like they receive the cash although they didnt receive cash. This way both the income and expense will be recorded.
Is this what anyone else would do? I would be happy to get some help on this.

Thanks

Comments

  • coojee
    coojee Registered Posts: 794
    I am doing the bookkeeping for a Charity and they use Sage. There are a few issues with the books from previous years. There is an opening balance of 2500 in one of the bank accounts which seems to have been a result of mistakes with clearing down opening balances when the software was first set up in 2010. They have left it on there for years but want me to get rid of it now. I am not sure how to o this. This bank account hasnt been reconciled since the initial entries either.

    Also they receive income from some companies in the form of payment of their bills. I have thought of dealing with this by opening a bank account in the 1200s for the income and linking this to a restricted income code in the 4000s and then simply paying the bills from the bank like they receive the cash although they didnt receive cash. This way both the income and expense will be recorded.
    Is this what anyone else would do? I would be happy to get some help on this.

    Thanks

    Re your second query, I would personally do it by way of a journal but you're right that the income and the expense should be shown.

    Re your first query, would need more thought, I guess the first thing to do is reconcile the bank. The problem is that the only way you can get rid of the bank balance is to DR another account which will increase their expenses. How material is 2500 to the charity?
  • Antoinnette
    Antoinnette Registered Posts: 118 ? ? ?
    coojee wrote: »
    Re your second query, I would personally do it by way of a journal but you're right that the income and the expense should be shown.
    That maybe a simpler way...So would it be simply Dr the Expense Account and Credit the restricted Income account?
    coojee wrote: »
    Re your first query, would need more thought, I guess the first thing to do is reconcile the bank. The problem is that the only way you can get rid of the bank balance is to DR another account which will increase their expenses. How material is 2500 to the charity?

    I am slightly worried about reconciling the bank account as it hasn't been done since 2010 and any entries I make now will affect the major account balances of previous years. £2500 is very material to them. Its a small charity. I have not seen all the bank statements but if the initial opening balance is correct then it may simply be a case of dating all the transactions in the current year end an reconciling it to that date with a note on the statements explaining why. I have seen another accountant do this when they have already filed accounts but I have not done it myself. Would this be a solution?
    Thanks
  • coojee
    coojee Registered Posts: 794
    That maybe a simpler way...So would it be simply Dr the Expense Account and Credit the restricted Income account?



    I am slightly worried about reconciling the bank account as it hasn't been done since 2010 and any entries I make now will affect the major account balances of previous years. £2500 is very material to them. Its a small charity. I have not seen all the bank statements but if the initial opening balance is correct then it may simply be a case of dating all the transactions in the current year end an reconciling it to that date with a note on the statements explaining why. I have seen another accountant do this when they have already filed accounts but I have not done it myself. Would this be a solution?
    Thanks

    Yes DR the expense and CR the relevant income account.

    Any new entries that you need to make in the bank account to get it to reconcile will have to be made in the current years accounts regardless of when they took place otherwise they won't be accounted for in any set of accounts. If the accounts are anywhere near correct though you shouldn't find many such transactions (I'd hope not anyway, if you do then the accounts have been seriously mismanaged) I'd treat it as a balance sheet audit, make sure that all your assets are correct; bank account, petty cash etc and then whatever's left over must be reserves. Essentially you're starting afresh. It's difficult with a charity though as you don't want to be writing things off but at the end of the day if the money isn't there in the bank then it isn't there and regardless of where it's gone it has to be written off. Whether you (or the trustees) decide to investgate where the money went is a different matter.
  • Antoinnette
    Antoinnette Registered Posts: 118 ? ? ?
    Thanks coojee
    Well the main bank account is in the red as well in Sage but the bank statements don't reflect that. It may just be a case of payments being made from wrong bank accounts when being recorded in Sage. A balance sheet audit sounds like the way to go, even if just for my peace of mind:001_smile:
  • coojee
    coojee Registered Posts: 794
    Thanks coojee
    Well the main bank account is in the red as well in Sage but the bank statements don't reflect that. It may just be a case of payments being made from wrong bank accounts when being recorded in Sage. A balance sheet audit sounds like the way to go, even if just for my peace of mind:001_smile:

    Sounds like that could be the problem, fingers crossed. I know what it's like to inherit charity accounts from someone who didn't know what they were doing.
  • Donna Curling
    Donna Curling Registered Posts: 59 ? ? ?
    As it is a prior year have you checked the balance sheet or asked accountant to see if opening balance difference?
    Donna Curling - AAT Tutor
    www.completebookkeeping.co.uk
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