Current Account Balance Error

I’m finding an imbalance in my current account as the opening entry in the current financial year spans the end last year’s tax year and the start of this one.

In all it’s a £90 income, £60 of which was put through last year and £30 this year. The reason for this was that the date of the 1st payment in was the 30th March 2015 and the 2nd was the 6th April 2015. Both of these cheques were not lodged in the bank until the 8th of April. Whether that was the right or wrong way of doing it remains to be seen but now when I import the statement it shows £90 so it doesn’t balance.

I use a separate holding bank account for cheques (written or received). When I write a cheque I log it as a payment out of the holding account, when it is cashed I log that as a transfer from current account to the holding account. The other way round, when I receive a cheque I log the payment into the holding account, when it clears I log the money in on the current account as a transfer from the holding account.

That way my current account in QuickFile always matches my bank statement exactly, but the holding account shows me what I should expect to go in or out in the near future.

Thanks for your reply. I’ve just checked the bank lodging book again and it was cash, not cheques. Does that change things?

For cash I use the “petty cash” account in the same way - payments in or out are logged to that on the date they happen, deposits and withdrawals on the current account are represented as transfers.

So in your case you’d have three transactions on petty cash, two payments in (£60 in March and £30 in April) and one transfer out (£90 to current account on 8th April).

Thanks for the suggestion, but maybe not going to help in the here and now as I just need to see how to re-adjust this transaction.

Can anyone help me with this please? Thanks

Hi @jeremygadd

I’m not sure I 100% follow, but I’ll try my best to help!

Am I correct in thinking that you have 2 cash payments received on different dates, but you didn’t deposit them until 8th April?

Yes, @QFMathew that’s right. 1 was accounted for in the 2014-2015 financial year, the other in the 2015-2016 year. I know I probably shouldn’t have done it that way, ie. I should have put them through for this year, but I was doing it on when they paid me, but wasn’t able to actually bank either transaction until 8th April.

I think I’m with you :slight_smile:

So what you should have:

Petty Cash Account
30/03 £60 in, tagged to invoice
06/03 £30 in, tagged to invoice
08/03 £90 out, tagged as transfer to current account

So your cash in hand would be accounted for on the correct days in petty cash. And then it’s moved to the current account when it’s deposited

Hope that helps?

@QFMathew - no it was all put through the current account into my bank.

Maybe I’m not reading things correctly so I’ll simplify it:
The issue is simply that £60 was accounted for on tax year no.1 and £30 on tax year no. 2, but QF shows it as £90 from tax year no.2. How do I adjust it now so that it only shows £30 from tax year no.2??


So you never had the money in hand directly, it was deposited straight into the bank by you or the client?

The quickest and easiest way to correct it, is to delete the payment in the wrong year, and re-enter it in the correct year and tag it that way. Unless you’re on VAT cash accounting, when payment was received has no accounting significance as income and expenses are all calculated from the issue dates on the invoices

@QFMathew - thanks again for your reply. I’m still struggling to understand this. I should have said that I started a new QF account starting from the 2015-2016 tax year, so there are NO transactions for the 2014-15 year. This means that the 1st entry on QF shows £30 income, BUT my bank statement (the printed one from my bank) shows £90 as £60 was from the previous tax year.

Not sure if this is the right way of doing it but seems to work.

I simply added a new transaction of £60 Money In for 6th April 2015 and tagged it as bank transfer from Proprietor Drawings Account. Balance now the same as on the bank statement :slight_smile:

That would certainly sort the imbalance out! However, I’m not an accountant so can’t advise on whether that’s been recorded correctly or not and whether it would affect your tax return. It sounds OK, but I would double check with your accountant if you’re still unsure.

Cheers. No accountant I’m afraid, but as far as I can see all it is doing is correcting the imbalance. I have already accounted for the income in the last tax year and paid the tax on it so simply adjusting balance.

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