Reserve Account Still showing

This little issue, remaining from last year is still plaguing me!

When I was finishing the 12/13 accounts (last minute as always) for some reason I always had a reserve £600 even though the account was a sole trader account.

I messed with it a bit to get things right before I started inputting the data for 13/14 and finally righted the issue…I was doing the reverse of what I should have been doing to correct it.

Well, I closed the year, checked the following year…banks are showing £0 in the reserves for the start of 2013…however, when I check balance sheet for 12/13 13/14 and 14/15 (yes, not yet closed 13/14 or 14/15) they all still show £600 reserves.
I do not have any idea how this is possible?

Am I just being very very thick?

I am suspicious this may be a fault as it doesnt matter what date I enter in the “to” box, it shows me the same data.

By reserves are you referring to “Retained Profit & Undistributed Reserves”?

When you closed your accounting year for 12/13 the balance of the P&L gets moved to the balance sheet as reserved profits. So that £695.60 on your balance sheet is just reflecting this, it has nothing to do with your bank accounts.

but this is affecting all my future balance sheets.
The profit at the end of the year was my partners earnings (or at least reduced the amount of money he put in as an when it was needed)
It is still there for 2014, 2015 etc

As I am inputting the purchases for the next year, it is messing with the reserved profits for following years.

I am really desperately trying to get my head round this…

I am concerned that the retained profits will build and build and affect the look of the accounts or possibly something more serious in the furture. Obviously there is no retained profits - but the balance sheet shows the picture of what the buisness has, right?

Maybe Im panicking about nothing

Should I just Ignore whats happening in the retained profits…

I don’t think you should be too concerned. the most important thing is your P&L is correct as this is what is used to determine your tax calculation.

Sole trader balance sheets are rarely accurate as strictly speaking there is no line between you and your business so trying to assess the value of a sole trader businesses is always going to be fraught with problems.

If those retained profits were actually drawings then you could journal them as such to the proprietor drawings account. Although I wouldn’t worry about it too much.

I should add I’m not an accountant, so if you do have a doubt it is best to speak to a qualified accountant.