Hi Dawn
Can you add your first name so that it appears under the signature bar in posts - saves us looking it each time. (edit profile---> Signature)

Is this the same charity as your other posts?

If so, would help if you can advise on something I alluded to back in 2016 - which account were these 'sales invoices' being posted to?

Just to check - is it actually 'income' that you get from these groups? ie can you clarify what exactly happens with the sales invoices. Do they pay them? Or is it just to allocate the actual COST of running such groups?

Also Shaun asked for a bit of your background a while back (http://forum.bookkeepers.network/t61873320/new-here-hello/) that sort of thing really does help in answering such questions so we dont talk either above your head or indeed down to you, so can you perhaps pop something on now pls.

Ok a couple more Qs as I ponder this one, although Im still keen to understand how you have been processing the 'sales' invoice so far, even so far back as when this was done manually via excel.. I seem to recall you saying about getting to the last year end a while ago. Or have they not been keyed?

Qs

• is any/all of the grant restricted funds?
• are those restricted funds retained in a separate physical bank account with this set up as a separate bank in your software?   Or are the funds just held in an account in your Balance Sheet (asset)?
• What process is there in place to get agreement to the spend of the funds - is that essentially what the sales invoice is trying to achieve?  Who signs off to say that such is acceptable/agreed? Does the sales invoice show a clear split between what has been spent via the restricted/unrestricted funds.
• are the sale invoices raised via the software?  Have the internal groups all got individual (debtor) accounts in the software.  If you run a TB today does the balance on the debtors control account match the individual debtor accounts?

I may think of some more depending on how you answer, but I have an idea in my mind how to sort it (but only if you are doing what I think you are!) to put it right for the back stuff and then perhaps a suggestion as to a way forward so it doesnt get this 'messy' again.

Only other thing I just need clarification on is you mention ''CR Centre costs and DR Centre costs'' - does this mean the centre costs account is nil? Is this on the P&L?

Are there lots of entries if you need to effectively start again? (Just a thought!)

 

 

Cheshire wrote:

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Ok a couple more Qs as I ponder this one, although Im still keen to understand how you have been processing the 'sales' invoice so far, even so far back as when this was done manually via excel.. I seem to recall you saying about getting to the last year end a while ago. Or have they not been keyed?

Qs

• is any/all of the grant restricted funds?  Some of them are restricted, but mostly unrestricted and just centre groups
• are those restricted funds retained in a separate physical bank account with this set up as a separate bank in your software?   Or are the funds just held in an account in your Balance Sheet (asset)? Our restricted funds are held in our general bank account.  Maybe this is partly where the system is not set up correctly, as there are no separate BS sheet accounts for each of our donors.
• What process is there in place to get agreement to the spend of the funds - is that essentially what the sales invoice is trying to achieve?  Who signs off to say that such is acceptable/agreed? Does the sales invoice show a clear split between what has been spent via the restricted/unrestricted funds.  Yes, in the case of restricted funds, this is essentially what the internal invoices are trying to achieve and, in the case where invoices were raised for restricted grant funds, this was requested by the grant funder. Yes, the invoice shows a clear split and is only for restricted expenditure. In the case of non restricted funds, the invoices are raised as a result of actual usage according to our records.
• are the sale invoices raised via the software?  Have the internal groups all got individual (debtor) accounts in the software.  If you run a TB today does the balance on the debtors control account match the individual debtor accounts? Yes, all are raised using the software and individual debtor accounts, but all grouped together i.e Community Centre-Internal.  RE running a TB No, I "paid" the invoices which then of course increased our bank by the amount of the invoice, so I then did a journal to reduce the bank and CR an expense a/c I created for each type of expenditure e.g Minibus use - Group 1 or Room Hire - Grant xxx

I may think of some more depending on how you answer, but I have an idea in my mind how to sort it (but only if you are doing what I think you are!) to put it right for the back stuff and then perhaps a suggestion as to a way forward so it doesnt get this 'messy' again.

Only other thing I just need clarification on is you mention ''CR Centre costs and DR Centre costs'' - does this mean the centre costs account is nil? Is this on the P&L? The DR would be to the expoenditure a/c I created above eg minibus use-group1

Are there lots of entries if you need to effectively start again? (Just a thought!)  There wouldn't be a huge amount, and I'm thinking it may be best for now if I delete all my journals and start again anyway - but I really want a clear idea of the correct way this should all be treated.

 

 

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Hi Dawn
Sounds a right nightmare. Not sure if I can cover this one off on a forum as there appears to be a fair old amount of issues.

Firstly - was ANY of this in quick books at your last year end? If so - then I will start with working backwards and my comment about the 'debtor issue'. Can you get a report at the last year end that shows from your Trial Balance - the debtors control account. Then this needs to match the year end accounts as prepared by the Accountant. This also then needs to match the total of the individual debtors accounts at that same date (you can get those figures by running a report and ensuring the year date is quoted and not allowing for any later payments.

You absolutely should not be issuing sales invoices to anyone other than external groups who use the centre. I cannot understand any grant authority that would suggest such. All they are required to know is whether or not their funds have been spent in line with the grant and what is left of the funds and is it being controlled properly.

If you absolutely must issue sales invoice then anything you do in this manner to keep them happy then just do not post to the accounts and even better keep OUT of the quickbooks process. then all you need to do are the appropriate journals, bank payments and bank receipts.

How do you know what is in the restricted funds pots for each of the grant providers? Is this kept on a spreadsheet? This kind of split MUST go into quickbooks somehow, doesnt need to be a separate bank account although that is best practice. It can just be by using separate accounts in the assets section of your software. So eg when someone uses up some of the XYZ grant to buy a new tyre for the van (just a mad eg) then you process that as a payment to the Bank (cr) and key the entry to the XYZ grant account (dr xyz asset code). If that tyre is paid for just out of your own funds then you would process that as a payment to the Bank (cr) and key the entry to motor expenses (dr expenses code).

If you process a journal through the Bank can you still do a Bank reconcile (only asking as some bank recs on old software do NOT allow it).

What Quickbooks softwre are you using? Desktop or online? Can you restore a back to save a mass deletion of entries?

Having had a quick re-read I think some of the confusion, which I alluded to earlier, is due to the mixing up of dr/crs as laid out. That said this charity should not have any internal debtors on its books nor internal sales as this is inflating the P&L and making the Bal Sheet look stronger than it is. Easiest way is to start dealing with it as per the above. Also I wouldnt 'pay the debtors' via the Bank, just do Credit notes to those debtor accounts but code them to the restricted funds account. This reduces the amount of restricted funds you have (which is correct as you spend the grant folks cash). 

Unless Ive lost the plot.  Hard to visualise without seeing a TB/audit trail etc.

-- Edited by Cheshire on Sunday 10th of December 2017 04:09:10 PM

Apologies Dawn
I originally did a part answer with the intention that you read that part/answered the Q then did a part two answer. But then I went in and edited it and clearly rushed the answer! Sunday head not working fully, although Im not sure its any better at this time of the day! Sorry!

You are quite right in that the grant is cr income - restricted, via the P&L and once they are spent they do need to reflect in the P&L. What I would do though is also separate them out via the bank (in actuality and in the software). So that would add the extra layer of needing to do transfers in real banking terms as well as extra entries then from the XYZ asset account, but that should keep the grant bods happy and then save on a spreadsheet, but that of course is up to you guys.

Just as a quick aside - I would really push for the Acocuntants adjustments to be done in Quick books otherwise it will be wrong at the year end. I would also get their file workings (extended TB) if possible so that you have a start point for this year. But TBH, if its outside your comfort zone I would insist that they get another firm of Accountants to do the work to protect your professional intregrity (and personal assets in the event of a problem with the Scottish Charities bods).