Does the other person come from a Cash Accounting Business?
The way that I see it is that your approach will work and there would be no confussion. The alternate approach being put forwards divorces the documentation from the payments and receipts cycles and could result in failures in credit control and payments unless it is accompanied by equal changes to the system to emphasise non payment or non receipt.
Personally I think that there are few systems as good as seeing empty folders as opposed to full ones!... Of course, seeing totally empty folders means that one should make a B line for a recruitment website before anyone else notices! lol.
Back to the scenario. Getting the documentation out of that folder also becomes a priority with the oldest numbers being addressed first.
Put my flag in your camp on this one as I feel that yours is the preferable system although such does not means that theirs will not work.
kind regards,
Shaun.
-- Edited by Shamus on Friday 6th of July 2012 03:47:23 PM
__________________
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.
I am new to this forum so apologise if I have posted in the incorrect area!
I have received conflicting advice on how to file away the papers of a business who use the cash accounting system for VAT.
Do you tend to file the paperwork in date order irrespective of whether invoices/purchases have been paid in that quarter or do you only file those paid in that quarter?
basically whatever system works for you provided that everyone within the organisation adheres to the same approach!
I would not file away anything until receipt (keeping it in sequence in a pending file) but then ensure that it was filed in the correct invoice/purchase order number sequence upon receipt / payment.
Always file everything assuming that a competent bookkeeper or credit controller with no prior knowledge of your system is taken on and needed to understand the filing system without any time being spent on training (which seems to be the general reality out there).
Could they easily lay there hands on the documentation?
kindest 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.
I like to have two pending files, one for purchases which are not yet paid and one for sales invoices which are yet to be paid.
My quarterly VAT files contain only purchases which have been paid and sales invoices which have been paid in the quarter.
Someone has basically come along (after I have been doing it my way for years) and told me it is wrong and all invoices should be kept in the same file (for each quarter) regardless of whether payment has been received/made, their point being that all invoices should be filed by date so they coincide within the correct quarter i.e. all 01Mar - 31May invoices go in that quarter file regardless of whether they have been paid or not. Personally I think this would cause a lot of confusion...
As Shaun has said, there is no wrong way as long it is consistant, and understandable.
I tend to file purchase receipts in one file in decending date order (just because it is easier to file the later receipts, without having to dig down to the bottom of the file every time to archive the latest receipt). I file sales invoices in decending invoice number order.
I let the software take care of the VAT, and it doesn't matter (to me anyway) where the the receipts/ invoices are filed because the supplier/ customer accounts let me know what's outstanding.
If I want to trace a hard copy of a purchase/ expense receipt, I just need to know the invoice/ receipt date, go the file to that date range.
I am also lazy, and only try to handle bits of paper once
Like I have said in previous posts, different bookkeepers will do the same thing in different ways, and it will denote more about their style than their bookkeeping knowledge. During WW2 Bletchley Park code breakers could recognise individual German wirless operators by the way they keyed the morse code. The code was a constant, the way the key was tapped was individual (I believe the code breakers called it a "fist")
That last bit was mainly for Shaun
Of course all receipts could be scanned and stored electronically, which is diffrent again
I think that any mention of the word "Draconian" or "Sage Tax" in a post people would know that it was me without ever looking to the left.
Sure that I've got other signature traits as well (besides an inability to spell).
__________________
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.
Out of interest do you scan the reciepts etc to your Pc or a memory stick??
Does eveyone else do this? I tend not to do it, one client there is no need as I don't do all the bookkeeping, its such a large company, there are several of us who all have our separate parts of the business, and about 90% of it comes via email so always got something on the PC, or if I don't have it someone else does.
I had one client (lost him recently thats another thread), if I had scanned in all his stuff it would have taken me a week to do just one month as there was alot of paperwork, and I know for a fact he wouldn't have paid for it, he liked to keep things to the bare minimum.
Most of my clients do their own invoicing via their own PC's with on word or excel, and then they give me copies so I suppose you could say they always have a copy of it anyway.
I personally don't do it for my clients but I did I would charge for doing it. It is something I looked into but at the moment it isn't something my clients want.
I do do it for my own stuff though, and scan to a pdf file (some are sent to me electronically - phone bill for example). I save to a file on my PC but it is backed up to a disc, and synced with Dropbox. Ironically, I haven't had the nerve to shred the originals yet until I am confident everything is OK
