How do you go about things when records are incomplete? I know taking things forward should be fairly easy once you have established some kind of starting point to take forward from. But how do you use software when the records are so incomplete.
I'll give an example. Say a client doesn't bother to mark on the back of the bank pay-in stub which cheques were being paid into the bank and they just have a total. They may also be paying in cash at the same time and haven't taken a note of the cash being paid in. Is it pointless using software and probably better using spreadsheets until some kind of starting point can be found.
I maybe be just here thinking of worst possible scenarios but I know some people forget to write who a cheque was for. This is easy (?) enough to find out if there are invoices for those amounts. But in the scenario above there may be multiple customers paying by cheque at the same time.
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Never buy black socks from a normal shop. They shaft you every time.
Pretty impossible to keep sales and purchase ledgers in those circumstances. I've got two cash retail outlets on the go at the moment. One has half his till rolls missing, with no other takings record.
The other has entered a 3 column spreadsheet with amount banked; cash wages and sundries. The total column is headed Takings! On one day there was a £47. tax refund and nothing else. Therefore £47.xx is the amount in the Takings column. Oh dear.
Anyway, here's my point. Not certain how I'm going to tackle the first one yet, but the second one his whole years cash outgoings are less than the takings figure.
I'd pass this as enough takings except he has just been done for paye and vat fraud. I think the income tax man will be rubbing his hands.
-- Edited by Don Tax on Wednesday 9th of November 2011 12:46:38 PM
All i can suggest is to ask the client what it is for.
For money going in do you have the total sales for the period? If you do then you could do a quick reasonableness check if the money going in is for sales. Subject to outstanding lodgements and debtors at period end.
Likewise for money going out do you have all the purchase receipts/invoices? Again a quick reasonableness check will see if the amount paid out is reasonable subject to outstanding cheques and creditors at period end.
It is not identifying the missing amounts it is knowing whether it is possible to enter these things in Sage. I'm not explaining ths too well am I (even I'm confused by my explanations at times).
This is a hypothetical scenario. I'll just take the sales side of things are they are more likely to have the missing banking details. I have a pile of sales invoices (probably 21 months as the person realises their tax return must be done soon. They know which accounts are paid and are unpaid but of those that are paid there is no date known for when they were paid (year one or into year two). How do I get the balance down to zero for those that are now paid when I don't know when something is paid? Or do I just do manual bookkeeping for that period and start on sage from today onwards?
I know I shouldn't worry about these things until they happen - I'm just trying to find out if Sage is a waste of time if I don't have ALL the details available. With VT Transaction I can change dates easily enough but in Sage if I change a date it will leave deleted transactions all over the place.
Are there clients where you just can't use software?
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Never buy black socks from a normal shop. They shaft you every time.
Peasie, I'm inclined to agree that you need to find a starting point. I guess you could enter unidentified items to the suspense account but then you have a sorting out job to do at a later date which is not going to be fun. I would be asking the client if they have income other than sales to give you an idea of where else the funds could have come from. Or you can enter the income as a bank receipt on the correct date, allocated to your sales nominal code where you know it's definitely sales and other income where you can't be sure. Either of these ways give you a nominal account that is a "holding" account that needs to be sorted out at some point though. It sounds as if, in this particular scenario, your idea of using a spreadsheet initially is a good one.
I think it's your own judgement call based on your knowledge of bookkeeping, and of the software that you use, whether to put a particular client through bookkeeping software or not. WHat is right for one client may not be right for another.
I tend to put most people onto Sage but I have some that prefer the report style of QuickBooks and other sole traders for whom VT is adequate.
One under used answer to a lot of questions on here is to trust your gut! It may not apply to those with very little experience or practical knowledge but once you've been in business a while you do develop an instinct for the right approach for each client.
