I'm hoping someone will be able to help me out with the following:
I used to do the books for this person before, I am self taught (only doing it for 4 years but only one persons accounts so their accounts is all I know) and kept his accounts in order to the penny. Took 2 years out to spend time with my daughter, have been asked to resume doing the books. The tax year 15/16 is showing a difference of £17,000 between sage and the bank accounts!!! confuse
I'm working from home so have been given a new laptop with just the sage software on it nothing else. I have had a quick look but it looks like the errors are from the start of the tax year and probably straight through . As an example, on sage a payment for vehicle licensing is recorded as 323.40, but the bank statement shows a payment of 269.50, so it looks as some transactions when inputted had vat added to them when it was not needed. I have no idea how to rectify each transaction, as I cannot start to reconcile this tax years bank statements until I am starting from the correct balance
Oh by the way it seems I am using version 22 of sage, this is new to me as I was using a particularly old version last time so I am slowly navigating my way around.
I'm not on a computer running Sage at the mo, and my version's older than that anyway (er, v20 if memory serves).. so I'm speaking very generally here, but...
I see from the other thread that you've got to the point where you know when the account was last reconciled - but from what you've said that reconciliation may be wrong.
Joanne mentioned the reconciliation history - which you can find by going into the bank reconciliation screen; it should be a button at the bottom. Click on that and you will HOPEFULLY see a folder filled with PDF files generated when previous reconciliations were done.
Offhand, I can't remember how it generates the filenames, and I obviously don't know how your computer is set up to display folders - but with a bit of luck you can identify when each of the reconciliations were done. If necessary, list them in a spreadsheet - filename in the first column, date you can see the reconciliation to be in the second; once you have them all listed, sort the spreadsheet so that they're in date order.
Then you can look for the corresponding bank statements and see if the reconciliation, er, reconciles. Whack the difference onto the spreadsheet as well, and you can hopefully build up a picture of when it started (probably just after you left the first time!) and how it gradually built up to the current difference.
The chances of it being £17,000 it one go is slim - it's more likely a transaction here, another there, building up - such as the vehicle licensing you mentioned. But working through them like that, you should be able to work out at what points the reconciliation went wrong, and by how much each time. (So, for example, at the end of April it might have been £12,134 out, but at the end of May it was £13,211 - so in that period there were differences totalling £1077, and so on).
With transactions like the vehicle licensing one you've found, it'll almost certainly have already been included on a VAT return, so you won't be able to change the transaction. The amount, as you say, sounds like VAT has been added - so check the transaction in the audit trail history screen (er, company... transactions?) One of the columns will say if it's been included on a VAT return, another the tax code, the tax amount and so on.
For versions of Sage up to the one I have, the easiest fix for such cases is to reverse the transaction and then post another correctly - so for a payment that has VAT when it shouldn't, post a receipt that matches it, then post the payment as it should have been. (You could also just post a receipt for the erroneous VAT, but some people find the two pronged fix is clearer further down the line).
If there are *lots* of such transactions, it's possible to summarise them in a separate document, and then use a journal to correct them en mass, but the summary is as much work as dealing with them individually.
Newer versions might offer other options for fixing things.
Another problem you're going to have, if that vehicle licensing one is anything to go by, is explaining the problem to the business owner if a significant amount of that £17,000 is erroneously claimed VAT; it'll need repaying to HMRC. And if so, due to the substantive amount, it may also be necessary to notify HMRC rather than just 'fix' it on the next return.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
Hi again Fiona For the moment I'm going to come at this from a different angle to Vince and ask a few more questions, so I can have more of a ponder. Hope you don't mind the questions!!
This is one of the most current versions of sage, so I'm assuming all the clienuts back history has been put on via a backup. So can you actually access the historical reconciliations on your laptop? Or has that tar been added by way of opening balances?
When you say tax year, I'm assuming that co-insides with his year end. So...has the year end been completed by the Accountant (for 2015/16)?
You mention VAT (that sounds dreadful re the licence fee!), but just to check, is your client actually VAT registered and is he on the standard VAT scheme?
Would you be able to get access to the other, non bank, source documents?
Do you know when it was migrated to the new sage? Can you access the old one if needs be?
How many transactions are there, roughly in this period to tax year 15/16?
When exactly was the last Rec and have you managed to agree with the start figures?
Sorry for so many Qs at this stage.
-- Edited by Cheshire on Friday 2nd of December 2016 08:29:40 PM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thank you both for taking the time to think about my problem and reply.
I am very cautious when it comes to sage and I don't know the ins and outs of it yet, I just know what to do. I am waiting to do a course so I actually understand what I'm doing rather than just doing it. But anyway.....
Vince, I understand all your suggestions and will have a chat with the business owner next week and we can work out a way of tackling it.
Joanne, to answer your questions as best I can.....
~When I click on view history in bank rec, it brings me to an empty folder, so it seems they're are no backups on the laptop they gave me, just access to the sage software
~The accountant is currently working on the year end, he flagged up the discrepancy but couldn't see any obvious reason for such a difference
~Yes, he is VAT registered and on the standard VAT scheme
~It is possible to get access to other documents, I work from home so at the mo only have access to the sage software, paper bank statements and invoices for the current tax year.
~I don't know when it was migrated across, but could get access to old one
~Haven't figured out how to find out how many transactions there are
~ I haven't found an agreeing bank rec yet as I have no bank rec history, I only know the one done for year end was incorrect.
I will keep digging and hopefully somehow be able to solve it all.
I only said yes to doing the accounts again, as they used to be straight forward and it would be easy to do when my daughter slept, how wrong I was!!!
Thank you both for taking the time to think about my problem and reply.
I am very cautious when it comes to sage and I don't know the ins and outs of it yet, I just know what to do. I am waiting to do a course so I actually understand what I'm doing rather than just doing it. But anyway.....
Vince, I understand all your suggestions and will have a chat with the business owner next week and we can work out a way of tackling it.
Joanne, to answer your questions as best I can..... ~When I click on view history in bank rec, it brings me to an empty folder, so it seems they're are no backups on the laptop they gave me, just access to the sage software ~The accountant is currently working on the year end, he flagged up the discrepancy but couldn't see any obvious reason for such a difference ~Yes, he is VAT registered and on the standard VAT scheme ~It is possible to get access to other documents, I work from home so at the mo only have access to the sage software, paper bank statements and invoices for the current tax year. ~I don't know when it was migrated across, but could get access to old one ~Haven't figured out how to find out how many transactions there are ~ I haven't found an agreeing bank rec yet as I have no bank rec history, I only know the one done for year end was incorrect.
I will keep digging and hopefully somehow be able to solve it all.
I only said yes to doing the accounts again, as they used to be straight forward and it would be easy to do when my daughter slept, how wrong I was!!!
Thanks again to you both
Hi
First thing I would do is speak to the Accountant again and explain about the issue you have found with the VAT added to the licence payment made from the Bank which would lead anyone to think that there are some other such major issues with these books. You need to agree between you both and the client as to what exactly needs to be done next to rectify the issue and indeed then who is going to do this.
If this was me, I would be wanting the Accountant to do no more with the year end until the thing has been investigated further and everything put right. Question is then do you want to do this or leave the Accountant to do it.
One question to ask is did the person who made that mistake do the books since you were last there as I suspect then that will indicate how far back you would need to go and re-work, but care then as this may upset the apple cart in terms of the already submitted prior year accounts and worst case need them re-submitting.
It is pretty clear to me that the reason you have nothing in the history files is because no Bank rec has ever been done since the introduction of the new sage, plus Im not sure at this stage what has been used to bring forward the stuff from the old sage. To check that and a couple of other things - go to Transaction down the left hand side. See the picture. If a TB was manually keyed from the previous sage you will see this from the details box - the narrative should should Opening balance/Op Bal or words to that effect.
You can also see the number of transactions from this screen - see the column Ive circled in green. Click on that arrow and it will show the last transaction keyed. Click it again and it re-starts at number 1.
You can also see from this screen if anything has (or likely not) been Bank reconciled - see the circle on the right - the dates under the Bank rec column would then match anything you have in the folders (should be the same on the old sage, hence in part why Im showing you now). If you scroll across a bit more (not shown on the picture) you can also see a VAT rec column and whether an item has been VAT reconciled or not and on which date.
This information also shows on the Audit trail that Vince talks about.
Do you have opening balances and if so - what date? It should be very recent given its new sage.
Can you agree the bank balance keyed via these opening balances or is it far adrift then? (If could be if they issue lots of cheques and payins!)
Or - do these figures agree in any way with the prior year accounts?
If not then the first thing you need to do is get access to the older version of sage and try to find out when the last Bank rec was done on there, see when that was and work back.
What you need to do is find out the extent of the VAT added randomly to things it shouldnt be added to as this may be where your difference lies, the only way to my mind is manual tick back of everything that has been done. You can do this a couple of ways - whichever you feel most comfortable with in terms of reports - audit trail (from the transactions screen - audit trail across the top bar), nominal activity report excluding no transactions (via the nominal codes ---Reports option, probably my preference) or just dump that transactions list, example of which is shown on the piccie, into excel.
If the problem only goes back to the start of the new sage being used you may decide the easiest option is to rebuild the files and start again. Like I say - a conversation for the three of you.
Please do let us know if we can give any more hints and tips though, eg corrections as Vince suggestions if there turns out not to be as many as we think!
HTH
Edited as I forgot to include jpg!
-- Edited by Cheshire on Sunday 4th of December 2016 06:07:55 PM
