I would like to pick the brains of you guys out there.
I need to produce a monthly P& L and a YTD. I have never done this and only produced reports on an annual basis.
My question is if you produce say a report for September and then receipts and invoices come in for that month and you enter them in October then this is going to change all your figures for the previous month. What do you in a situation like that?
Anywhere I ever worked and produced management accounts monthly we would just show the extra figures in the October accounts, unless it was a very large amount.
The only time we would be religious about posting in the correct month was year end.
-- Edited by Mad Liz on Sunday 13th of November 2011 10:19:40 AM
I agree with Liz, the expenses would be included in October, the logic being that while not ideal you could keep amending the reports for 12months, which defeats the purpose of preparing the report.
If the expenses where material, I'd work on system to allow you to accrue for the costs.
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Hi there - Thank you both for taking the time and getting back to me.
I fully understand what you are both saying. I do have a couple of queries!
I understand the date issue of putting it in October - but if I am pulling reports off Quickbooks - won't I need to put it on the system with the correct date from a VAT perspective?
Also if I work on a system to allow for me to accrue for the costs - I would need some idea of the costs which are coming up and therefore make a provision. These costs are unfortunately chucked in an envelope and flung at me 6 months later so therefore I can't make a provision.
I hope the above doesn't sound too stupid - I am still fairly new to this all. It never ceases to amaze me how much there is to learn!
If you are just pulling the reports off Quickbooks then it won't matter. You will just need to explain to whoever is receiving the reports that items appeared in October relating to September and backwards.
Alternatively you can design a management accounts template in Excel whereby the P&L and Balance Sheet worksheets are populated by figures pulled down from the Trial Balance. I can send you an example of what I mean if you e-mail me.
As for VAT quarters, if you're getting receipts six months later it won't make any difference - you'll be outside your quarter dates in any case!
The whole point of management accounts is to give information as quickly as possible. It doesnt need to be 100% correct. As long as you get the majority in then that should be the main concern.
Where i work we produce management accounts within 5 working days of month end. This means that we close off the sales ledger the first working day after month end and the purchase ledger the second working day after the month end. We have advised suppliers that if they dont get their invoices in before the end of the second working day after the month end then their invoices will go into the next month and thus will delay their payment. Suppliers are now getting invoices in much quicker (its amazing how saying that delay in receipt of invoice will delay payment to them concentrates their mind).
All major accruals you should know about within 5 working days of the month end and any others that arent included will probably be immaterial and thus of no significance that they are put into the following month.
As has been said the monthly management accounts are to provide timely information on progress against budget etc as well enabling identification and correction of variances. If you have a prepayment and accruals schedule and/or these are usually standard amounts at fixed time intervals you can normally run the accounts straight after month end; especially if bank recs are done frequently and are kept up to date.
It will essentially depend on how up to date the accounts postings are.
