I've posted previously about a small business I do the bookkeeping for. They are a local shop selling groceries, alcohol, cigerettes, newspapers etc etc.
The bookkeeping so far is going reasonably well. I work from the information I get from them, e.g till reports, bank statements, purchase invoices, all the usual stuff. They have had a problem where - say they buy something in from a supplier, and add it on to their till, which is one they have designed themselves not a EPOS system you can buy, they don't always get the VAT coding right. So I think somewhere along the line they are buying things in that are standard and selling them as zero as they don't know which products have VAT and which don't (although in my view they could just check their purchase invoices as they enter things which would solve the problem) the accountant thinks there is a problem also in their till whereby it's not reporting properly, e.g you ask it for things in specific dates and we think it does weeks? If that makes sense. Anyway, they are getting a new till in the next couple of weeks so I'm hoping these problems can be resolved.
The shop has a manager, a deputy manager and is staffed by volunteers. It is monitored by a committee of members, and there is a treasurer. Only the shop manager and deputy manager are paid employees.
So on to my actual problem! Sorry, I have rambled. I have been doing these books since April, and got them up to date from January 2012. They are annoying as the shop is a Post Office too which they bank with, so they could easily bank every day, but don't, they bank maybe twice a week tops. They also don't run their monthly report on the correct day, e.g they ran the September report on the 4th of October, so although they count the cash and tell me what they had, it's 4 days late, and that amount includes sales/cash purchases etc that would have been made by then. I've asked them on several occasions if I can please have the report on the correct day, and even gone so far as to collect more bookkeeping until the actual cash day to try and get a proper reconciliation done. They have done the report on the right day 3 times. I've sort of muddled through and done endless reconciliations, and had it out at a running total of around 700-800 - the volunteers have made lots of errors and the card amounts they say they have are always different to the amounts Elavon pay in so I think that's where their difference is.
I've come to the end of October and I am over 2000+ out! I've checked EVERYTHING. Been to the shop, no they didn't do any banking that week that might not have been in the banking book (actual money banked takes 3-4 days to get to their account). I'm not even sure why I'm posting! What do I do now? If I have checked all my work is correct and everything else is accounted for, all I can say is that is the amount it is out by, isn't it? In the past, when things have gone wrong - I thought the VAT was quite a serious issue, yet nobody on the committee or the treasurer seemed particularly interested. I feel like me and the accountant are interested because I make a living out of it and so does he so we want to do our jobs well. I'm quite new to bookkeeping, I only started doing this in January - can anyone tell me what the situation is at year end if you get to it and you have a big cash difference? What do other bookkeepers do in this scenario?
Thanks for reading if you made it this far! I guess subconsiously this is starting to worry me a little, just the lax attitude.... I don't know. Any advice much appreciated.
Hopefully Steve will see your post as he had a handle on your previous posting.
Ask the Treasurer if he's sure he won't be responsible for any VAT or other debts - that might get him particularly interested. Really, it would depend on how the organisation is set up and if there has been any wrong doing.
There will be an explanation for all of this, but the worrying thing is that if the cash is regularly hundreds of pounds out then how is one to know if someone has sticky fingers in the till? That could be deemed as bad governance on top of any loss of VAT to the exchequer.
Couple of questions: which way is the Cash out of balance and is it the till reports that you are balancing to?
Yes, we have applied a scheme type calculation for the last quarter, and will do one for the next too. Not sure exactly which one it is as the accountant has done it and I have just made the journal entries in to Sage. When I started to do the books I went to see the accountant when the first return was due (they hadn't submitted any for a year prior, had just been paying assessments) my Sage figures seemed better than the scheme ones, so we went with them. Then for the quarter I've just done, we had an amount repayable to HMRC of 173 something, but 60k+ worth of sales and purchases, hence us both thinking something was not right, so he applied a calculation. He says it's not right for them in the long term though, as they also sell hot pies?
I don't think there has been any wrongdoing persay, they are all nice people and it's a small village shop so.... But then you never know do you. It's more irritating me that there IS an explanation somewhere but I can't find it. I don't like giving people figures that are questionable.
I am balancing to till reports yes, now I am wondering why if I'm not sure the till reports are correct?! They are generated automatically, but at the end of the month whoever counts the money inputs what they have in the safe etc in to the month end cash in hand figure, and I am trying to reconcile to that.
I'm meant to have 3000 ish in the cash till and Sage says I have 5000 ish.
Just out of interest Tim, is there any way I could make my own figure to reconcile to?! I have from them - a daily sheet for each day of the month with the total cash, card and coupon sales, total cash back, and total sales in each category e.g. alcohol etc. Also on the daily sheet is any till differences, (I put these on a spreadsheet then take the difference amount out of the cash till and put it to cash register discrepancies) supplier cash payments etc. If I don't trust the way they are counting it etc. Just wondering!
I am sure that Elevon take the cut before they hand over the transfer
They don't. They charge you quarterly for the rental of the card machine and they charge you monthly for each transaction. You get exactly what the customer paid transferred to your account.
Edit I'm talking about something different altogether it appears
-- Edited by Rhianrach on Thursday 8th of November 2012 08:09:10 PM
I am sure that Elevon take the cut before they hand over the transfer
Hiya, they do take the cut yes, once a month out of the first or last invoice I think. I take enter their invoice and just pay it out of undeposited funds where all the card payments go so I know that it's done and dusted! So they get one amount that is less the invoice.
Yes, we have applied a scheme type calculation for the last quarter, and will do one for the next too. Not sure exactly which one it is as the accountant has done it and I have just made the journal entries in to Sage. When I started to do the books I went to see the accountant when the first return was due (they hadn't submitted any for a year prior, had just been paying assessments) my Sage figures seemed better than the scheme ones, so we went with them. Then for the quarter I've just done, we had an amount repayable to HMRC of 173 something, but 60k+ worth of sales and purchases, hence us both thinking something was not right, so he applied a calculation. He says it's not right for them in the long term though, as they also sell hot pies?
I don't think there has been any wrongdoing persay, they are all nice people and it's a small village shop so.... But then you never know do you. It's more irritating me that there IS an explanation somewhere but I can't find it. I don't like giving people figures that are questionable.
I am balancing to till reports yes, now I am wondering why if I'm not sure the till reports are correct?! They are generated automatically, but at the end of the month whoever counts the money inputs what they have in the safe etc in to the month end cash in hand figure, and I am trying to reconcile to that.
I'm meant to have 3000 ish in the cash till and Sage says I have 5000 ish.
Thank you for your help :)
I have exactly the same thing. Sage says x amount the safe says y amount. It unfortunately can be any number of things, sticky fingers as mentioned, over rings not being noted or even generally poor maths.
One thing I will add is that whoever is counting the cash etc should in my view be reconciling this to the z reading and the end of day report from elevon, every day, and shouldn't in fairness be passing it to you until it is.
My case is different because one person reconciles it all then passes it to me to put on sage, any discrepancie is then just put to drawings at the end of the year, because if it isn't in the safe then they have obviously spent it
Personally I wouldn't worry about it, as long as you are inputting exactly what it states on the z reading etc and also inputting any over rings you are informed about then it isn't your problem. If they kick up a stink point the finger at whoever cashes up, shrug your shoulders and calmly explain that you have told them what needs to be done, they haven't done it and this is the mess it has caused.
Steve, thank you so much for your reply. I have taken in to account some of the Elavon differences, and put them to my undeposited funds, as this was understated.
The amount is a lot less now which I am pleased about, and I have rechecked everything back to the beginning of the year.
I have spoken to them and they acknowledged that as the shop is staffed by volunteers, there are bound to be some discrepancies, for whatever reason, but they have assured me it isn't my fault... I just told them that obviously I will record the information that is given to me and surely it is the responsibility of the paid shop manager to check the accuracy when cashing up each day, and they agreed so I guess that's all I can do!
I don't want to get funny with them about it as aside from that it's a nice little business to do, think it's because I haven't done a lot of cash stuff before, it just confuses me and sets me on edge! I guess as I know everyone says to keep a close eye on it I keep a ridiculously close eye and over think it!
Thanks all for your kind replies,, another helpful experience on book-keepers.org! I will post more often and not sit and stew when I have a question now, ha ha!
p.s *cue all boards clogged by endless questions from me! Mwahaha!*
