Hi, please could someone guide me on this topic? I have amended 2012 cashflow with actual figures that have taken place on the P&L, but the actual bank figures at the end of each month do not tally with the actual in the bank at the end of the month. This is because of the creditors that have been accounted for on the cashflow in a previous month and then are paid for the following month. Should the bank "actual" figure in the cashflow be the same as the Current bank account figure on the bank statements? Thank you very much in advance for any comments. Helen
Hi Sonya, thanks for your reply - that was my thought. However my client's bank manager has requested that I update the actuals in 2012 to carry forward the actual bank figure for Jan 2013 so the two cashflows "flow". Therefore I was worried that I was incorrect in my thinking. thank you
I am a bit confused by this (not sure what software you're using and I don't use Sage).
For any accounting system your system bank account should show you the intended bank balance assuming everything has cleared...so if you have issued a BACS or cheque as a supplier payment, your creditor will be reduced and your system bank account will be reduced by the value of this payment and will not tally against the real bank account until the payment clears (your reconciling items when you are completing your bank rec).
In your accounts (in my view) it's not really prudent to 'undo' accounting entries for payments you have issued or receipts you have received just because it doesn't balance against the actual bank balance. This (as I said) should be proven by timing differences listed on your bank reconciliation. Hence I would be encouraging the client to leave everything as is.
The key thing here being that any payments/receipts recorded in the accounts are accurate i.e you haven't recorded a payment to a supplier and the cheque is still sat in a drawer.
Apologies if I have got the wrong end of the stick re what you are asking.
Hi Melanie, thank you for your response. I wasn't physically altering any accounts in my Quickbooks. I was looking at the figures in an Excel spreadsheet - I input the "actual" data from the Quickbooks P&L figures for each month into this spreadsheet so we can compare what we budgeted for and what we were actually invoiced for (on the cost side of things). However, this doesn't mean that we physically paid for the "actual" expense in that month.... it could be two months later it is debited from the bank account. So this would mean there are timing issues between the actual bank account and the budgeted amount, would I be correct in saying that? Or should the "Actual" cashflow figures be input from the bank statement - but these would be gross figures. I am afraid this is rather overwhelming me. Many thanks for any feedback. Helen
