So I hope you can help me regarding some queries I have with opening balances for my Business Working Account & also PayPal.
So a bit of context regarding my query… We are working on accounts year 17/18, Our business is eCommerce and we migrated from running our accounts from a excel sheet to quickfile’s at the start of tax year 17/18, we have seen a massive growth in sales and thus the accounts are a little overwhelming regarding the voulme of accounts (sales invoices circa 5000 and a 1000+ purchase invoices) we have had to process, however Quickfiles has been a life saver in many areas and we have risen to the occasion getting our heads around online accounting.
So the aforementioned considered, we are looking to do a bank rec as we feel we have got the accounts in pretty good shape, having inputted & tagged everything on our radar. I have entered the opening balance of £718.68 for 17/18, with the date 31.03.17.
I have two transactions that have been tagged prior to the year start /opening balance date as they appeared on the bank statement in April 17, but pertained to the previous month and previous tax year (March 17) these were for a directors wages and a supplier invoice.
I notice that when I go into the business working account (yorkshire bank) the opening balance isn’t represented in the balance column, owing to the fact that there are transactions from the previous year, my first question is in the context of the bank rec (I assume that the bank statement should mirror quickfiles), how do I therefore deal with this scenario, so that the correct opening balance is represented and the aforementioned transactions (wages & supplier) are represented as coming out of the bank?
I thank you for your help and look forward to your response.
Enter reconciled bank balance of 16-17 on QF not actual closing bank balance for 16-17 , this way previous year’s payments and receipts would be taken care off as part of outstanding payments and receipts
Hi Really appreciate the feedback…
So I apologise as we are Layman and although we have a pretty good grasp on QuickFiles now, could you explain , exactly what figures to input and where. I have gone into the bank account, More Options > Reconcile and am asked start period & start balance, end period & end balance…
In the scenario I have set out whereby we only started using QF for year 17/18, which time period does the start and end period pertain to? If you could elaborate that would be great.
Once again many thanks for the guidance which is much appreciated…
There are two ways you can approach this. An “opening balance” on a QuickFile bank account is just a convenient way to create a journal that posts “money in” to the bank account on the hive date and posts the balancing entry to the suspense account. You then have to edit the journal (or create another one) to move the suspense balance to the right place or places. So if you have extra transactions prior to the opening balance date you can adjust the OB amount to compensate (e.g. if you already have a £100 money out then set the OB to £818.68), or if it’s just things like wages you could build that into the OB journal rather than tagging it from the bank (make it £200 wages and £518.68 capital introduced or whatever).
Although given this, are you saying that although these transactions really appeared on your bank account in April you’ve entered them into QuickFile with a date in March? In that case you might be better to enter the opening balance as it actually was at 31st March, put these two transactions on the April dates that they actually occurred, but set up the OB journal to put the liabilities on your balance sheet to cancel them out. So the OB journal would be something like
- Debit current acount (1200) £718.68
- Credit net wages (2220) the amount of the April director payment
- Credit creditors control (2100) the amount of the April supplier payment
- Credit something like capital introduced for the difference
Now the two bank transactions can go in on their real dates, tagged as “something not on the list” to 2220 and 2100 respectively.
Thanks Ian, this is great Advice!