I have taken over the bookkeeping for a client and it is basically a mess.
The accountant was offering my client a bookkeeping service in the way of a cash book on Excel. Sales invoices were being generated on Sage and the last supplier payment entered was April 2014. Anything invoice onwards is either in a paid file or unpaid file, (I havent checked yet, but i dare say there are invoices missing from both folders.
Secondly there has been no system in place for keeping a record of purchase invoices, so duplicated payments of invoices have been made and there are definately invoices missing. Again no system in place to keep track of due, overdue or paid invoices.
Thirdly, upon studying the accountants spreadsheet, there a quite a few entries with no vat, meaning the company have not been claiming the vat. Another problem is the coding of expenses. Some are coding incorrectly, exp - a service purchased for use in the company has been coded, directors loan account.
My aim now is to enter everything onto Sage, but where do i start. Do i draw a line under the mess and start from November. Obviously i will study the spreadsheet again and re code what has been incorrectly coded. Unclaimed vat, i am going to have to back track and request statements and go from there.
Is the accountant producing the final accounts for the year finished - whenever that was? If so talk to them and get some opening balances - always a good idea to be friends with the accountant!
If the accountant has been given the push you might have a bit of fun, they may not be so keen to be forthcoming with balances for you, this is a busy time of year and you will be seen as the 'competition' - you will have to calculate the best set of opening balances possible using what records you have.
As to a start point - by implication in your post their year end is 31st Oct, so a clean sheet and start on 1st Nov makes sense - but I would check who is supposed to be doing the 2013/14 accounts! You may have a lovely reconstruction job on your hands.
Opening balances i doubt will be accurate as no proper system has been in place for sales/purchases and payments. I think i am going to enter all purchases onto Sage and then payments/receipts then go from there.
If the accountant gives you those opening balances, and they are in accordance with his accounts, its the only place you can start, whether they are correct or not.
I would start with those, post my year to date, and then write all the imbalances (which were part of the opening balance) off to a suspense account, and give it in writing to the client that you have done this for the accountant to review at this year end, because he is the only person that can know how to deal with them because they were generated in the year he was in charge of...... then its left in their hands to sort out.
There has been no system in place to record customer/supplier transactions or payments. The cash book which has been based on the bank statements is accurate and thats about it.
Going through the cash book, there are at least 70 invoices missing for Oct-Dec vat period, so i cant even claim all the required vat back at present.
Y/E is 31st March.
I asked the accountant about opening balances and it fell on deaf ears. Oviously as there isnt any to provide.
Well, All you can do is start from 1st April 2014, reconstruct via the cash book and bank statements, recording VAT where you have it. Then you have the wonderful job of setting a fire under your client for all the missing paperwork.
Hopefully he/she will come up with at least some of it if you point out how much money they are losing by not having it! Probably means endless adjustment journals, which will be irritating, but that's my suggestion for what it is worth.
Has the client not been given the year end accounts with balance sheet - you could start with these figures. May not give all supplier breakdown but at least you can continue with the bank etc., and hopefully some areas with automatically come to light.
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
