I am trying to enter an opening bank balance in VT Cash book. I have looked in the user guide where it has very good instructions on how to do this but when I come to the analysis ledger column I can not enter it as a creditor, the nearest I have to a creditor is a supplier. I think this is because the particular client I am working with is set up as self employed (not sure). The next column is analysis account column which it says I should select *opening balances contra.... again there is no such option.
Please could some one advise of a better way to enter an opening bank balance on to VT Cash book?
For self employed Cash at bank would be an Other Current Asset
I just pushed a test transaction through from VT Cashbook to VT Accounts (via VT transaction+ to set up the period end dates) and it does come through correctly (Nothing in the P&L, BS shows correct B/Fwd balance).
So, £100 B/Fwd should show as :
Cash Book: Current Account 100.00 Asset: Other Current Assets -100.00
Hope that helps.
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Depends on which type of account you have et up - Go to the "Set Up" then "acccounts" "All" - at the bottom of the list will be the account you need - if its not there set it up.
The Sole Trader chart it will be under "Capital Account - Brought forward" The Home account it will be under "Net Wealth" - Net wealth
Its different depending on which template you used to set up in the first place
I have debited the current account and credited the current assets but then when I looked at the balance sheet and saw the balance in current assets as a credit I didn't think it was correct, surely it should show as a debit on the balance sheet because the balance is an asset to the company not a liability. You'll have to forgive me it has been two years since I studied or did anything with final accounts, I need my brain to be kicked into gear.
you would probably be better off with Bill than myself on this one but I'll give you my logic behind the original answer.
I am used to entering full sets of brought forward balances for limited company accounts.
The double entriesfor each are to use the primary account (such as Bank: Current Account) and then the double entry is allocated to Creditors: Opening Balance Contra.
In this way you state exactly how much is in each account rather than applying a conventional double entry and the Opening balance Contra account should balance tself off.
Lets take an example.
£100 Bank: Current Account
-£100 Creditors: Opening Balance Contra
Then
-£100 Share Capaital Brough Forward
£100 Opening balance Contra
The effect is that the share capital balances off the banks and the opening balance contra balances off itself.
Now lets look at where there is not suffeicient share capital to balance the bank.
£100 Bank: Current Account
-£100 Creditors: Opening Balance Contra
Then
-£90 Share Capaital Brough Forward
£90 Opening balance Contra
The two sides of the equation still balance as the current assets are sitting at £90 with Creditors: Opening Balance Contra sitting at -£10.
The account in the final accounts that the Opening Balance Coontra is placed in is the Other Current Assets and Prepayments.
In your case the client is self employed so a slightly different chart of accounts. For that one in order for the opening balance contra to appear in the Other Current Assets and Prepayments you make your brought forwards entry in Assets: Other Current Assets.
If you do not enter anything in the Capital Account, Balance at start of Period with a double entry back to Assets: Other current Assets then the only thing to keep the Current account in balance will be the Other current assets resulting in an opening current assets of zero.
It took me a little while to get my head around the way that VT processes opening balances brought forwards but I do know that the above works perfectly as I've put through several companies on it and for each the results come out of VT Accounts as they should.
Bill (Wella) will no doubt now come along and say, no, there's a much easier way to set up opening balances in VT than that.
The flaw in my approach will if anything be that you are only attempting to input an opening bank balance rather than a full set of brought forwards balances. The reality though is that the bank has to relate either to capital or a liability in order to keep the balance sheet sweet otherwise it will set up a negative creditor to keep matters in balance amongst the current assets.
Hoping that either the above makes sense or Bill dons his batsuit and rushes in from stage left to point out the flaw in my approach which as I say, works for me but there may be n alternate approach.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Not quite sure exactly what's going on but it looks like you have credited the wrong account. I think in this case you should have credited the Capital B/f account but that will depend on the other balances that need to be entered.
If you credit the asset account it will show incorrectly on the balance sheet, as it should be an asset not a liability, where as the capital B/f is a liability account.
The opening balance contra account works a bit like Sage's suspense account, when all balances are entered, you should be left with a zero balance in the contra account.
If you are still struggling, it might make a bit more sense to me with a bit more detail
Thanks for your replies Shaun & Bill. I have now got myself into a right old pickle.
Basically this is what I have done - I firstly debited the bank a/c with the balance b/f and then credited the current assets (Shockingly I didn't think at the time that this wouldn't be correct, it was when I saw the BS that i realised).
So this is how I have now got myself in ''the pickle'' - I found the write back function and have corrected the bank and current assets. I now realise I should have just reversed the transactions myself because the write back function seems to have cleared everything altogether I can't seem to find any trace of what I did. I think I should have just posted a payment to the bank and then adjusted the current assets in that transaction. Now that the transaction has gone the BS is showing correctly but I now need to repost the balance b/f to the bank and the capital a/c, but I will have the balance on my bank rec with nothing to reconcile it against because I had already rec'd that statement. The chances are I could be being really dim and there might be a very good explanation but the fact of the matter is I don't feel that confindent (yet) on VT Transaction.
Hopefully you will understand what I mean.
Thank you for your help you two, it is much appreciated.
on the crediting the current assets that is actually correct in VT as it's the way that opening balances are brought forwards.
The issue that we have here is that you are only attempting to bring forwards the bank balance without anything to balance it against.
If this was a first year with nothing brought forwards first entry would like as not be the capital account and the bank account with one balancing the other. (standard double entry).
As years go on the link between whats in the bank and whats in the capital account becomes divorced but as you appreciate the two sides still have to balance.
For that reason I can't see how one could only put in the brought forwards bank balance. You surely have to take the full set of figures from the last set of accounts and put those through as the opening balances so that everything is in balance before you start adding the new transactions.
The creditors come into play because it serves as the other side of the double entry for every opening entry. As Bill says, if this is done properly the creditors value should come out as zero so when you look at the balance sheet only the actual asstes such as the bank balance and balancing capital / liabilities are shown with values.
In the balance sheet the field used for opening balance balancing is "Other Current Assets and Prepayments" if every opening asset, liability and equity item uses this then although it seems wrong to be using an asset it is really only the balancing side of the double entry and once everything has been included it should be zero.
When I first started using VT more than once I deleted everything that I had done and started again (after ensuring that I printed out lists of all transactions). You will find that if things are in a real pickle this might be the fastest option.
Just to confirm before I finish. I assume that despite the title you are actually using VT Transaction+ and not just VT Cashbook? My feeling is that VT Cashbook is something for end users rather than bookkeepers and VT Transaction+ should be the starting point for us. (I actually use VT Accounts as I want to see the data pushed through to a full set of accounts even though my supervisory body doesn't actually allow me to offer that service to the clients yet).
Bill is much more of an expert on VT than myself but I hope that the above makes sense of why the current asset gets used in entering opening balances.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Vicki, when I put my explanation on which account you should use, I took at VT cash (which I have, but don't use) - but without know which template you started with I could not tell you exactly which account you should use, but hoped gave you enough information to figure it out. But you seem to have ignored my post completely.
When you first start to use VT cash you are given options, of which template to use. Each template has slightly different default accounts which can be changed and added to. I guessed you were using one of two templates - home or soletrader, but I did not know for sure. If you were using one of the others, you could have mentioned it as the default accounts would have been different and I would have looked up the account you should use.
From reading the laters posts my suggestion of the Capital account - Brought forward was the one every one has agreed is the correct account you should use.
It is easiest to delete a transactions in VT and do new correct transactions rather than trying to correct them. As long as you are not doing VAT returns or started another accounting hear, (in these cases you should lock the transactions so they cannot be deleted) there is no reason why a wrong transaction cannot be deleted.
I do apologise that i missed your post and I can see that what you are saying makes great sense, I have set my client up with a soletrader account.
I have now written back the transaction so I have a clean slate. Now I have to post the bank balance brought forward and correctly credit the capital a/c. How can I reconcile the bank statement when there will just be a value on there for the balance brought forward, that particular bank statement was one of the first ones I rec'd so all the other transactions relating to the statement have been reconciled. Can I un-reconcile once this has been one? I think I have been trying to get too technical - I really enjoy doing journals and trying to fix problems but think I may be making life to complicated for myself.
Hi Shaun
You have made me think about the full set of figures! The client I am working for actually has a fully qualified accountant who does all of her final accounts. I literally am just posting the receipts and recording the payments made, but had all the bank statements so just used the balance brought forward on the first statement as a start. Maybe I need to ask her accountant for the full set of accounts? I think I may have to just start all over again with VT if there is no way of reversing. Oh well it's all good practise I suppose and I'm learning lots of new things so all is good.
Oh good I'm glad I didn't offend you. I think I was in such a flap that I just missed your post completely.
Thankfully I can say I have cracked it. I have managed to un-reconcile the bank statement and deleted the transaction to repost it correctly. I sat and read the user guide inside out....... I'm still definitely a long way off to being an expert though, lol!
Just want to say thank you to all of you for helping me.
I think that the one major issue with VT is the lack of training material.
The manual gives you a good start but as touched on above there are situations where Bill and myself do things differently to get the same results because we've had to work through problems ourselves.
If anyone reading this does know of any training materials for VT Transaction+ please post a link in this thread.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Another Accountant & I presented a Seminar in Alton on VT transaction+ and VT final Accounts in May. The seminar was oversubscribed within a month of organising it! The only hiccup we had, was we each used it with a different Operating system and didn't realise it operated slightly differently and looked completley different!
I may set up another one in the future as we now use the same operating system, but that just goes to show the problems with software when we use older versions.
