Okay, you may or may not have a couple of problems - but one of the problems you think you might have might not actually be a problem after all. Clear? No? Good... then I'll begin. :)

The fact that he has posted all the purchase invoices via the purchase ledger is not actually a problem. Even if an item wasn't bought on credit, and was paid 'over the counter' or whatever, the fact that it was posted to the purchase ledger just means it has to be cleared via a supplier payment rather than entered as simple payment instead.

Also, even if he didn't change the program date, there's no problem - as long as he correctly dated the transactions he has input.

That's where your first real (potential) problems lies: Has he entered those transactions correctly - with the right date, to the right nominal codes and accounting for the VAT as appropriate?

Your second real problem is with the set up itself: Has he set the right financial year within Sage?

If he's dealt with the postings themselves correctly, you can re-use his work instead of doing it all over again - even if the financial year is incorrect. And even if he's messed the postings up, it might still be preferable to use what he's done rather than start again; it depends how much of a mess he's made.

So your starting point is to look at those two issues: The financial year, and whether the postings have been entered correctly.

If you mean expenses as in those incurred by employees or directors, which are to be reimbursed, then they should still be on the right side. Being posted to the purchase ledger means they are creditors, and will remain so until the expense is repaid via a payment to the purchase ledger.

In general, creating a purchase ledger account for the expenses of each individual who might incur them is a sensible move - although given what you've already said, the question is whether or not the person who posted them actually did that, or instead created purchase ledger accounts for the places the expense items were purchased. Or for that matter, if they posted them to a silly nominal code - perhaps an 'expenses control account' or something like that, so they'll be creditors on the purchase ledger, and debtors on the control code. (The debits should, obviously, have gone to the relevent P&L codes - but if that's the case, all you'll need to do is analyse what's in that code and journal it out to the right places).

The worst case scenario is that the postings themselves are wrong - in which case whether they are salvagable depends just how wrong, so I'd say start with this expenses situation, and the general nature of the postings: Have a look to see if all that is correct first - the dates, VAT and nominal codes, etc.

If that is - largely- correct, it's easier to re-use the existing postings.

Then look at the financial year. If the year is wrong, but the above is correct, I'll try to guide you through exporting the data, and then re-importing it after you've set Sage up correctly.

(Re-importing it is the easy part - but exporting it is a bit fiddly because it needs a report to be modified, and then - possibly - the exported data to be modified in a spreadsheet.)

If both are okay, you've no significant problems.

Ouch. That could potentially be a lot of work clearing them down from the individual accounts, or a lot of work correcting them. Ideally, they need to be corrected rather than cleared down from where they are. There's no quick fix for that - especially if it's a lot, which it sounds like there is. :(

It wasn't nearly as bad as I thought it was.

The financial year was correct and the entries/postings were mostly correct for the one month I had time to fully check. A couple of wrong nominal codes, one invoice entered twice, one with T1 instead of T0 and the rest were odd 1p's due to VAT calcs (journal entries for 1p?) An hour's worth of journal entries and we'll be ready for the next step.

Taking one month at a time we're going to enter the sales invoices next then try to reconcile with the bank.

I'm going to take your suggestion of setting up control accounts for each director (In the early months they paid for expenses personally then took the money in a lump sum from company bank account.) That way I can clearly reconcile the payments from the bank to a group of expense receipts. I'm glad I didn't re-enter them as bank payments because I wouldn't have been able to reconcile so easily.

Found out today that the company also uses a factoring company - Debtors will be what the factoring company owes us. If I've got this right in my head I'll 1) set up new account for factoring, CR Debtor Control/individual supplier accounts, DR Factor Control then 2) when the factoring company pay us CR Factor Control, DR Bank. Should I set-up Factor Control as a "Bank Account"?

I'll have a look-see if there is a factoring thread here somewhere.

did you mean to send me back to this thread with your link?

Have seen the Factoring threads here - very useful and glad to see I was right in that it would be a bank account/loan account.