Hi, Im currently doing the books for a sole trader and have set sage year end in line with tax year, but sage only allows me to specify year end by month, ie apr 09 to mar 10. but there tax year for self assessment is specifically from 6th apr 09 to 5th apr 10. this means that some transactions made for example on 3rd apr 10 would be in the next accounting year according to Sage.
Has anyone any experience of this, and know if there is anything I need to do to work around it?
31st of March as a year end for accounting purposes is fine from Sage's point of view.
Even from the Tax Man's point of view using 31st March instead of 5th April is acceptable.
If you wanted to be 100% correct, then all you would do is do the books up to 31st March and then provide Journal adjustments to take it up to the 5th April by posting them on the 31st March, then when you start the next year, you reverse those entries out and post April Transactions as normal.
This takes the transactions up to 5th April and puts them in your current year, then when you do the next year, it takes those transactions out so you dont double count them.
Personally I wouldn't bother reversing the journal out, I would just date anything from 1st April upto 5th April as 31st March. I think with my usual slant towards being pragmatic about these things I may get a lot of flak from the purists though!
Personally I wouldn't bother reversing the journal out, I would just date anything from 1st April upto 5th April as 31st March. I think with my usual slant towards being pragmatic about these things I may get a lot of flak from the purists though!
Rob
Totally agree with you Rob - I always say to people that the big difference between bookkeepers and accountants is that bookkeepers are way more accurate!
The reason being is an accountant works with the concept of materiality, a great get out clause in most situations, especially when the bank doesn't rec by a couple of hundred quid, its just not worth the time to tick it through.
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I wouldn't say Bookkeepers are more accurate as such. Not many will adjust year end balances for after-date invoices etc.. whilst date-wise the records will be correct, but from an accrual point of view they wont be.
And If an accountant writes a bank diff off...who posted the bank transactions? heh heh.
Have to be careful with changing dates on things, especially when it comes to VAT quarters and also aged debtors and creditors reports. I would agree on posting older invoices on a more current date due to vat quarter already done, but not to just fit the year end.
