Where do I start - New accounts

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi,<BR><BR>A friend of mine started his own business Sep last year. To give myself some experience I have approched him and asked if I could keep his accounts. He has agreed!!!<BR><BR>The question is....where do I start? Also, should I use manual accounts or computerised?<BR><BR>Your help is much appreciated.<BR><BR>Rgds,<BR>Mark.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    Hi <BR><BR>I do the accounts for 2 companies, currently I use Sage for both, but one of the companies has asked if I will transfer everything onto a manual system, as they think it will be good experience for my coursework. Personally I prefer doing it on the computer as the element of error is greatly reduced, it is also a lot quicker to input and you can do Balance Sheets and P+L reports etc at the click of a button. You could argue that a smaller company doesn't really need the expense of a computerised system as it can also have a lot of in-built features that you will never use, but if you intend to carry on working for yourself in future, it might pay to use the computer and take on other accounts work as well.<BR><BR>If you decide to purchase Sage, look on ebay first.<BR><BR>Hope this is of some help.<BR><BR>Tracy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    Hi Tracy,<BR>Thanks, that does help. How did you get started doing the accounts - ie where did you start putting all in the information in?<BR><BR>Ta,<BR>Mark.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    Hi Mark<BR><BR>When you have Sage accounts you are able to type all the opening balances direct into the accounts, so thats where I started. You have a chart of accounts set up already for you which holds all of the Nominal account codes set up as fixed assets/liabilities etc, on the whole you don't really need to change any of this information, unless you have specific new accounts you need to set up.<BR><BR>I entered all of my debtors and creditors into the Sales and Purchase ledgers, using a relevant default nominal code for them, ie 4000 for sales and 5000 for purchases, you have the choice of more specific codes ie, codes for advertising, telephone, elec, rent etc (the list is endless), so you can preset all of your customers/suppliers so that when you enter an invoice for them the default nominal code comes up on screen for you, and automatically posts the details to the relevant account in the Nominal/Main ledger.<BR><BR>I entered all of the opening balances in the accounts, either through Sales/Purchase ledger, or directly into the Nominal record, (such as your bank balance etc) and basically thats all you need to do to start.<BR><BR>If you are using stock you will need to make sure the Sage package has a stock record, and then you make up your stock codes, enter details such as who the goods were from, how much they cost you, what your selling price is,and how much is in stock etc, then when you do sales invoices, the goods will automatically come out of stock when you update your invoice details.<BR><BR>The first time I set a company up from scratch I was a little nervous as I was a bit unsure and I had assured them I knew what I was doing! but I needn't have worried, I just entered everything from the manual accounts into the computer and double checked by doing a manual Trial Balance and checking the PC balanced.<BR><BR>In reverse, now I am doing a manual system from a computerised one, I have printed off a computerised Trial Balance and entered the information manually into my main ledger and subsidiary accounts, and again done a manual T/B to agree the accounts.<BR><BR>Hope I haven't waffled too much! If you need any further assistance I will do my best to help:)<BR><BR>Tracy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    Hey! Thanks Tracy...you have been a real help. That doesn't sound quite as scary as I first thought.<BR>So basically I will to start the accounts off with the initial capital and bank account amounts. Then start listing all the supplier invoices and sales invoices in date order. <BR><BR>To start with sounds like I will be using excel....am I best just setting up all the day books and T accounts... or is their a simpler way?<BR><BR>Rgds,<BR>Mark.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    Hi Mark<BR><BR>Noticed you might be using Excel when I saw some of the replies posted in the General discussion forum, your suggestion sounds ok, although I'm not brilliant at Excel! Are you starting the accounts from scratch at the beginning of his financial year?<BR><BR>Tracy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    Hi Tracy,<BR><BR>The thought had crossed my mind to start from April05 - and just get the opening balances for each account as of that date. Would that be the simplest thing to do?<BR><BR>Mark.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    Hi Mark<BR><BR>Yes!!!!!!!!<BR><BR>Tracy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    Hi Mark<BR><BR>Me again! I have just noticed that your friend stated his business in Sep of last year, which in effect is when his accounts should run from. Now from what I can see you have 3 choices here, you can either go back and re-input all of his accounts into your system (if there isn't already one in place), you can carry on inputting from where he has left off (assuming that he has kept his accounts in order), or you can gather together the value of all of his individual accounts and open an opening balance for each in your Excel system, ie Bank account £13,000, Rent, £4000, etc, and run his accounts back round to September 05, then he will have a full years worth of accounts.<BR><BR>Now it may be possible to change his year end, but you would probably need to speak to an accountant about any implications involved here, I know a company I worked for had a 13 month year one year, but I'm not sure if you can have a 7 month one (ie Sep04-Mar05), which would give you April as your new tax year, to fall in line with the government financial year.<BR><BR>Hope this is ok!<BR><BR>Tracy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    ah right, yes that would make sense Tracy - I will have a good luck at what he has noted down too far. But I know its not much - which is why I'm getting involved. Lets hope he has kept everything!<BR><BR>Cheers,<BR>Mark.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    I would recommend making the accounts from start of trading to 5th April, for tax reasons it makes it a bit easier for the accountant and negates the need for overlap profits.<BR><BR>Annette
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Where do I start - New accounts

    It is not so important as to what date you start be you need to get all of the purchase and sales invoices, receipts and other important and useful documentation into some sort of order. My tutor has had me working on a real set of accounts for nearly 2 months now and it has taken me that long just to get all of the documents into some sort of order from which I can work from. But make sure that the order you put them in is how the company wants them as it will be you who gets the grief if they are not the way the company wants them as I found out recently.<BR><BR>Kay

Categories

Privacy Policy