I'm converting from a manual system. I tried Sage 50 (recommended by our accountant who's a Sage dealer) but found it really overcomplicated. Then I tried Quckbooks pro which was easier than sage but still over complicated and quite bloated with some strange terminology used. I recently came across VT Transaction plus. It doesn't look as up to date design as others, but I think it is just as powerful. Anyway, now to my question regarding VTT+.
I started a new company file from 1st April (new financial year) and entered all of the opening balances etc at 31st March from bank statements and entered outstanding purchase invoices from previous tax year as per the VTT+ user guide.
The problem is the bank statements do not take into account any deposits made or cheques issued near the end of the previous year.
How do I account for cheques issued and deposits banked towards the end of the previous year which weren't on the bank statement at 31st March?
These transactions and any VAT concerned have been accounted for in the previous tax year, that's not the problem. The problem is the opening bank balance is not a true representation of the actual balance at 31st March because the bank was unaware of these cheques & deposits.
If I just adjust the opening balance entered in VTT+ to take account of the cheques and deposits not listed on the statement, this will cause a problem when they do appear on a bank statement, as I will be unable to reconcile the statement by matching to transactions.
Just put them in as normal accruel / prepayment entries prior to the year end balanced to the opening balance contra then reverse them out when they actually hit the bank account.
HTH and welcome to the forum,
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.
Thanks for the reply Shaun. This VTT+ software is really new to me, I'm still trying to understand how it works and find my way around. I would greatly appreciate it if you would kindly explain step by step, exactly how to do as you suggested.
If I understand correctly, as an example, for a purchase of goods on 22/03/12 paid by cheque the same day.. Firstly I set the current year in VTT+ to Y/E 31/03/12, then click PIN and enter the purchase invoice as normal on 22/03/12 as cost of goods sold, mark it paid by cheque number 123456 on 22/03/12 from current account (this would reduce the balance in current account), and allocate it to opening balance contra account. Then when the cheque shows up on the bank statement click on RJN and enter the same thing again to reverse the transaction (surely this would cancel the transaction and increase the bank account balance back to what it was)? I'm getting all confused and haven't even started on the unaccounted for bank deposits! Are bank deposits entered in the same way but using credit notes? And how do I explain bank deposits relating to cash from the Till in the shop with no person to issue credit notes to??
I'm getting all muddled up again here... As I said above, I would greatly appreciate step by step instructions.
you need to think what you are attempting to achieve in the financial statements.
Hope that I'm reading the situation correctly which is basically you ordered inventory paid for by cheque on the 22nd.
The cheque will have cleared before the period end, the inventory may or may not be delivered by then.
Surely what you are recording then should be dr Opening Balance Contra, cr creditors
Then when the bank statement arrives dr Creditors cr bank
And when the inventory arrives cr OBC, dr inventory
The likelihood is that everything will have gone through before the period end and following the above recording the correct dates it will very much look after itself.
Of course, using the OBC is in many ways an unnecessary step here and we could simply have gone dr inventory, cr bank as everything should have happened before the period end but that assumes doing those entries close to period end slightly after so that you have all information to hand.
The only time that the OBC comes into play here is as a bucket where there is no corresponding entry for opening balances but in this situation that should not be the case.
Sure that I've written the above incorrectly. I'm full of a cold and old grey matters not behaving properly so appologies in advance if I come back later and say no, no, no that's not what I meant to write at all.
Conversely, when Bill (wella( has finished laughing at my flu addled reply above sure that he'll sweep in to do it properly... Unless of course he's on the lemsip as well!
Sorry that it's not a good reply, normal service will be resumed within the next 48 hours I hope!
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.
Sorry to hear you are not feeling well. I do hope you feel better soon. I often find that Nurofen Cold & Flu tablets keep me going when I have to, but it's still difficult to concentrate on anything.
Re. VTT+ Please allow me to clarify the situation... I've entered all of the opening balances from various bank accounts and loans etc at 31/03/12.
I've entered invoices which were unpaid at 31/03/12 as creditors in Opening Balance Contra account.
Now, upon cross referencing the current account bank statement against the bank paying in book and the cheque book, there are some items which did not appear on the bank statement at 31/03/12. But they appear on first statement in the new financial year. The delay is due to the post and clearance through the banking system.
The cheques were sent out in the post within the last couple of weeks before the year end. They were issued to various companies in respect of purchase invoices previously received for goods previously received and were recorded in last years purchase invoice book and VAT return etc.
The 2 bank deposits that were not on bank statement at 31/03/12 were in respect of a combination of cash sales via the cash register in the shop and various invoices issued for sales & services.
The delay in these deposits not appearing on the statement at 31/03/12 is due to our local bank branch not processing the 2 deposits made on Friday 30/03/12 until Monday 02/04/12. So they don't appear on bank statement until the next financial year. The invoices and till receipts to which these deposits relate were all recorded and processed on the VAT return for Qtr end 31/03/12.
The problem I have is although the opening balance figures I entered into VTT+ match the bank statement they don't take account of the above transactions.
But do I even need to take account of these transactions because they've already been recorded in last years records and cash book etc, which unfortunately won't match up to the bank statements due to the weekend period at year end and the banks delay in processing the deposits. Therefore the actual funds available in the current account should be figure on statement + missing deposits = true balance.
The other problem is reconciling the bank statement in the new tax year which now shows the above transactions from the previous tax year. Should I even bother entering the cheques at all when they've already been recorded in last years cash book? The same applies for the deposits?
I suppose I'm basically asking how will VTT+ cope if I do not reconcile the movement in the current account balance against anything (that it knows about)?
As I said originally, this is all new, coming from a manual system using pen, paper, book ledgers and an old database which has been in existence for at least the last 30yrs that I'm aware of. Amendments/adjustments are easy with pen/paper. The pen is mightier than the keyboard
Okay, what I'm trying to achieve is to have the correct opening balance showing in the cashbook after taking the un-presented bank transactions into account. What I don't know is if I have to amend the current account opening balance to do this or if this is done somewhere else in VTT+.
When entering Opening Balances at 31/03/12, the current account balance is taken from the bank statement at that date.
The cashbook balance (calculated as below) needs to take into account the un-presented (to bank) transactions at 31/03/12, but where do I enter the cashbook balance?
I'm back to firing on most cylinders again after a weekend of ODing on Lemsip.
What you are actually trying to achieve is for anything uncleared to be dumped in the OBC (Opening Balance Contra) and then unwind it from there as the items are cleared.
If the opening balances are correct and the OBC contains all of the uncleared items then everything else should very much look after itself.
Sorry if my answers are not quite matching up to your input but I think that maybe I use VTT+ slightly differently in that I use it for data entry but then push everything through to VT Accounts.
Anyone else reading this thread feel free to jump in as I'm sure I've not done a very good job of explaining things in this instance.
__________________
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.
