Morning guys, hoping someone's online today to help me!!
I'm recently qualified, lucky enough to have got 5 lovely clients all already had bookkeeping systems set up, just taken on a new one who never has. Taken over from 01/01/2012. I have four months of catch up to do, and VAT due at the end of the month.
They are a small shop selling alcohol, cigerettes, groceries etc. Never come across one like this before, and I've put them on Sage.
I've divided the sales up in to 21 lines with correct VAT codes e.g Alcohol 4000 standard, Fruit and veg 4001 zero etc.
What I'm stuck with is the paperwork. I have one monthly report detailing totals sold for the month. Then I have a daily report of which sales were cash/cards. The simplest thing to my mind is to put all sales to undeposited funds, and journal them either in to the cash till or the bank as I go through the month. Does anyone have an easier way of doing this?!
Also, how do I account for cash back? That wouldn't come out of undeposited funds so do I need a merchant expense account? Then CR Cash DR Merchant expense?
AND finally what about coupon sales? I was thinking take these out of undeposited funds and put them in 4009 discounts allowed.
Does anyone have any thoughts on my plan? I only have clients who have set up bookkeeping systems so this is a real first for me!
Also any general tips on grocery shop bookkeeping would be so appreciated.
It sounds like you are pretty much on top of things but here are my thoughts.........
For credit card sales, I do a similar thing. I book all the sales using the correct VAT codes as receipts into cash till account and then take the credit card sales out of cash till and journal to credit card account. It is a good idea to journal these on each day there are sales entries as they will be paid into the business bank account periodically and the reference will always mention the date of sale. As you have already taken care of the VAT, these journals would be T9. You will have daily expenses out of the cash till, so these credit card entries are a bit like these.
I am not sure about cashback, but assume they are taken care of in the merchant account and will be paid into the business account periodically so you could alwayd just Credit Cash till and Debit credit card as above or create another bank account called Cash Back......but you will have to be able to see when these are paid back. If they are simply included in the credit card repayments, then probably best to do the former.
As for coupon sales......I think it is a good idea to show the complete audit trail and so these sales should be reflected on the P&L but the 'payment' should be shown as the discount allowed....somewhere! So if you want to put the total sale in and then input the coupon value into discounts allowed, then I don't see any problem wiuth this. It means that you can see at a glance what coupons have been accepted....you may even want to create a sales category coupon sales??
My only tip on this kind of business is making sure that the cash reconciles with the banking as it can quickly get away from you. Oh, and since the business is VAT registered....look into one of the retail VAT schemes which may make things easier (and more financially advantageous for the business).
Thanks Don, I think I'm going to have to, as I have a huuuge cash difference! There's 4000 odd more in the cash till than there should be. My undeposited funds is also overdrawn, so I think they ring in cards as cash! Luckily I have the Elavon statements to go from, so I know the actual amount is correct, but I know that there's a big difference of cash that hasn't gone anywhere. What would you do in this situation? I've double checked four times! I don't know what to do now... :(
The only other thing I can think of is that they don't count all the cash they have on the premises for the monthly report they give me. In which case, their report is understated and I have the wrong figure to be reconciling to in the first place! Arrrghhh!
It is surmountable if f they ring into the till debit/credit cards/cheques/postal orders etc as cash. In fact, I'd say preferable, but I'm not familiar with Sage. I suggest you follow suit and treat all takings as cash and all bank deposits of takings as cash too. Add to this any withdrawals of cash from the bank.
Does that help? I'll go into further detail if you have any questions, but for now I'm of to a barbi :o)
Vouchers go to the balance sheet as they will be repaid by the clearing house when they send them to be redeemed. The sale of goods will have already been accounted for in the daily sales figure. Sage isn't great for dealing with cash based businesses - too many transfers & journals. !! Brightpearl on-line software has a nifty daily cash reconciliation screen that does all the postings for you. Retail is my "thing" - petrol stations in particular -so just ask if you want info
Thanks so much for your help everyone. Gillyfleur I'm finding Sage a real pain with them.. You're totally right, I think 85% is journals and transfers! And you can't delete them either if you make a mistake! I learned on Sage but I really don't think it's the best system for them, especially as the bookkeeping is quite bitty, if that makes sense. Brightpearl sounds intriguing! As so much of the shops' bookkeeping is based on daily cash recs - it would be easier to see where they're making mistakes also, it's staffed by volunteers and they make quite a few mistakes when ringing in sales etc. Tell me more! :)
You could also summarise on an Excel spreadsheet and just post the totals once a month ? You could create your own reconciliation system then and you'll know that all the banking entries are correct etc. before you post them you could save hours of time. I wouldn't have bothered with the 21 sales categories. It's only any good having them if you have a proper EPOS with back office and stock control. I started like you but most clients ive now condensed down to cigs, standard rate, zero rate, news, 5%, Epay and alcohol - mainly so I can keep an eye on profit margins. Theres only any point having all the categories if they're going to break the purchase invoices down as well and do monthly stock takes - and even then to get the p&l looking right and to calculate the individual margins you need to export it out to Excel as sage reporting can't cope with the correct layout. It's a huge amount of work that you won't get paid for and is only as good as the cashier ringing the sale into the till
I think you're right to be honest - doing it this way is taking forever. They asked for the 21 sales lines as they do have a back office system but they haven't entered any stock on it so it's completely out of sync. Also, this is the first grocery shop I've dealt with so I just went on gut feeling really! Sage can't cope with it all I don't think, I've posted literally thousands of transactions and I'm only just at the end of the fourth month, it does seem like a lot, compared to the other ones I have to be honest. I also use Microsoft Office Accounting which personally I find easier than Sage, but I don't think that would cope with cash either! Excel maybe the way forward - do you mean enter the total cash sales, total coupons etc? Thank you for your help, I'm still newly qualified and sometimes it's hard to know what to do.
It's fairly easy to design an excel spreadsheet to do a daily rec. a line per day and totalled down for the month. Sales plus other income minus paid out of till expenses minus cash to bank should = 0 +/- daily shorts/overs. You can expand your columns within your spreadsheet so as an eg. Cash banked could be 4 columns - cash, chqs, cards, vouchers. Sales could be 21columns. At the end of the month though all 31 rows totalled up give you a posting document to shortcut your daily postings. Hmrc guideline for daily cash difference is £1 per day if you use a computerised till as there should never be money missing or it be unreconcilable ! Ha !
