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Bank transactions relating to previous accounting year


#1

I’ve just started using QuickFile and have uploaded my bank transactions from beginning of my current accounting year (01/04/18). The upload however includes both monies out and monies in that are included in the company accounts for the previous year. Currently these are not tagged and so sit in the suspense account. My problem is that they are now in the P & L Report and thus included in the current years accounts. In the chart of accounts is there an account that is not included in the P & L Report that I can journal them to and still keep the bank account transactions matching the bank statement? Or is the only way to remove them from the P & L Report deleting the transactions and adjusting the opening balance?

Thank you


#2

Ideally you’d tag them to the appropriate places - if they’re purchases from the previous year then that would likely be the creditors control account, sales it’d be debtors control, etc, and you could just tag those as “something not on the list”.

This is assuming you’re on accrual accounting for VAT (so you’ve already settled the VAT for these items with HMRC). If you’re on cash accounting then you will either need to manually adjust your first QuickFile VAT return to include these items, or enter them as sales or purchases in QuickFile (dated at the end of the previous year) and adjust the opening journal to cancel this out. Then you can tag the payments to the invoices as normal and they will be included in your VAT return.


#3

Thanks for the advice - I’m on accrual accounting and have tagged the items to the creditors control account and the debtors control account. They are no longer in the P&L Report but are now on the Balance Sheet. As these transactions are included in the company accounts for y/e 31/03/18 as “Creditors: amounts falling due within one year”, “Debtors: amounts falling due within one year” and Corporation tax for y/e 31/03/18, I didn’t want them included in the Balance Sheet for y/e 31/03/19 as then they would be included in both y/e 2018 and again in y/e 2019 company accounts. I’ve tried re-dating the transactions as 30/03/18 in an attempt to move them out of the current accounting year but I see that by default the Balance Sheet in QF is cumulative from the first transaction so that didn’t work. I don’t want to leave them in the creditors control account and the debtors control account for the current year as that is where I intend to put any “amounts falling due within one year” amounts for the current year.
I’m thinking that I’ve either got to delete the transactions included in previous years accounts (meaning a mis-match with the banks bank statement) or untag so they sit in the suspense account and I manually remove when I do the company accounts. Unless anyone can advise another way?
Apologies for long post and my confusion with the processes available with QF.


#4

It’s the nature of double-entry bookkeeping that every transaction has two sides. When these purchases and sales were raised last year they would have appeared as expenses/income on the P&L report and as creditors/debtors on the balance sheet. When you tag the payments the following year you’re removing those items from the creditors/debtors total as they’re now paid up (the matching credit/debit going to the bank account).

In fact every sale and purchase in QuickFile goes through the creditor or debtor control accounts. When you create a sales invoice the income goes as credit to general sales (and sales tax control for the VAT) and the matching debit goes to debtors control, when payment is received it credits debtors control and debits the bank account. The debtors control account balance at any moment represents the total your customers owe you (the outstanding balance on all sales less any prepayments you’ve received and not yet invoiced). Purchases are the exact mirror image.


#5

I understand with the sales where I raised the invoice - as I’d only entered transactions in QuickFile from 01/04/18 that invoice from the previous year was not in QF. I’ve now added a ‘dummy’ sales invoice dated 30/03/18 and tagged the transaction to it - so removing it from the current years P&L and BS.

The ‘purchases’ however are not goods or services, they are director’s salaries for March 2018, shareholder dividends for y/e 2018, company house fee, VAT due on sales for y/e 2018 and Corporation tax due on profit for y/e 2018; none of which have invoices applicable to them. I’m assuming that I can’t produce ‘dummy’ supplier invoices for “Salary March 2018”, “Dividends March 2018”, “VAT y/e 2018”, “Corporation Tax y/e 2018” all dated 30/03/18 to tag the bank transactions to?

Thanks for your help.


#6

If you’re moving to QuickFile from other software then ideally you’d want to take a trial balance from your other software at the previous year end and import that into QuickFile so that your QuickFile opening balance sheet matches the closing balance sheet from the previous year. If you have done that then the previous year sales would be part of the starting balance on the debtors control account and you can just tag the bank transactions directly to that. Similarly the salaries, dividends, VAT liability and corp tax that were due but not paid at the previous year end will be liabilities on the opening balance sheet in QuickFile, and the payments can be tagged to those same nominals.

If you don’t have a full trial balance from your previous software you will probably have to try and construct one by hand from the closing balance sheet, splitting the bulk “amounts falling due within one year” into the appropriate slices (e.g. 2202 for the VAT, 2220 for salaries, etc.), and posting the final balancing entry to something like retained earnings - my business is a partnership rather than a ltd co so I’m not 100% sure what the capital accounts section looks like in your case.

(Usual caveats - I’m not an accountant nor do I work for QuickFile, so I’m just offering my view from my own research and experience, I’m not qualified to give specific advice)


#7

I previously used spread sheets so I’ll have to construct a trial balance from the closing balance sheet as your suggestion.
Thanks for all your guidance - much appreciated.


#8

It shouldn’t be too hard to build an opening balance sheet for QuickFile - basically yeah, split the “amounts falling due…” appropriately, then create a journal dated for the last day of the previous accounting year with those values as credits to the appropriate nominals, your initial bank balances as debits (positive balance) or credits (overdrawn) to the bank account nominals - including the director’s loan for anything you owe or are owed by the company - and then whatever is left over to somewhere in the capital and reserves section to balance things out. I wouldn’t bother setting opening balances on the bank accounts themselves, I’d just include them within this opening journal.


#9

Thanks - now done. As your suggestion I created a journal ‘opening balances’ that contained the “amounts falling due within one year” from last years accounts coded to the appropriate nominal codes. For the journal to work I had to ‘balance’ with the nominal code for the current account. The bank transactions were then tagged to those appropriate nominal codes. The need to balance the ‘opening balances’ journal meant that the current account was overstated by the ‘balance’ amount. To overcome this I created another journal to move he ‘balance’ amount to ‘retained profit’.
Not sure if this is the ‘correct’ way but it has provided the correct opening balance for the current account, the bank transactions mirror the bank statement and the amounts included in last years accounts are not showing in this years P&L Report or Balance Sheet.
Thanks again for your guidance.


#10

You could have put the balancing journal line straight to retained profit rather than going via the bank account but sounds like you’ve got the right numbers in the end.


#11

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