Hi, I'm new to the forum and am seeking some general advice
I have recently been employed as a bookkeeper for a small but rapidly growing Ltd company, mainly internet sales, two directors and now me.
I am not formally qualified, my bosses are aware of this, but have some experience with Sage Line 50 from dealing with the accounts for our small Ltd company several years ago.
Back story is that a qualified bookkeeper has been doing the job for them from home, in her own time. The volume of transactions increased so much over the last six months she no longer had a life & not being 'on the spot' had complicated things for all of them.
They use Kashflow which I am steadily becoming familiar with, previous girl gave me a few hours of training, mainly on the inputting of supplier invoices matching sales to World Pay transfers. The rest I am learning as I go along & doing Ok I think (the two bosses happy so far)
The agreed take over point was the end of their last VAT period, 31/5/19 and she is finalising the last year end with accountants before finishing for good. She has offered to help me at any time which is kind.
But, and it's a fairly big but from my point of view, there are a significant number transactions on the Kashflow system (sales & purchases) from prior years, and some from last VAT period. I have no idea how to deal with these, it's making it harder to enter batch payments because I have to wade through 20 odd pages of transactions, some dating from 2017 or earlier, instead of 3 or 4 pages. It can be very time consuming and my gut instinct is that they shouldn't still be there, either they're unrecoverable debts or errors. The company has recently moved from rented premises to their own building which is still being renovated and accounts paperwork is literally sitting in heavy duty shopping bags all over the place! I don't stand much chance of finding paperwork relating to these old entries very soon. I have made a start on organising a filing system, at least for May this year & onwards.
So my question is, how should I tackle these old entries? I am tempted to ask the bosses if I can have a meeting with the accountant to discuss a way forward but I'm not sure whether it's an issue that needs resolving.
Any advice welcomed but please be gentle with me.
PS I am thoroughly enjoying this job although only 4 weeks in, both bosses are great and know they need organising, chasing for receipts etc. they want everything to 'right' as much as I do.
TIA Christine
-- Edited by cristeen on Tuesday 18th of June 2019 11:41:03 PM
-- Edited by cristeen on Wednesday 19th of June 2019 10:04:20 PM
I would suggest that this is not a Kashflow specific problem and you might get less respondents because you mention it, but ignoring that I have a few questions to try to get a clearer picture. Just because something is from 2017 doesnt mean it isnt right.
My understanding is that you have lots of debtors/creditors (ie customer/supplier) balances outstanding. Are these all in seperate customer/supplier named accounts or are they mostly in say one labelled 'cash' or some such?
What does the business actually do other than internet sales? What do they sell via the internet? Reason I ask is that internet sales are motly cash based transactions so you wouldnt normally expect to see many debtors (customers).
What does the customer base consist of? Individuals? Or businesses?
Do they sell just here in the UK, or EU also, outwith the EU? What VAT scheme?
What date is the year end?
-- Edited by Cheshire on Wednesday 19th of June 2019 08:57:16 PM
__________________
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
Hi Cheshire, thanks for your response. I take your point about mentioning Kashflow, I will try to edit my original post!
Most of the transactions are in individual customer accounts, there are a lot of individual, one-time buyers and a few repeat business customers who buy fairly regularly. Being internet based the majority of sales come via Paypal or World Pay & there are very few refunds (= satisfied customers at least) This is why I am surprised that they are still lurking on the system. There are some walk-in sales as we hold stock of the most popular products but these are mainly card payments, again via World Pay & some over the telephone. Occasionally BACS payments but these aren't an issue. The company only sells in the UK & VAT is paid quarterly ATM on a cash basis (not sure that's the official term, but payments made and received through the corporate account as opposed to invoices sent and received) Year end is 28th February but some of these transactions date back to 2015.
On the supplier side we have two main suppliers, both paid weekly to keep payment amounts sensible. They were paying via the company debit card over the phone but we have now organised BACS for these as I am on the spot and can provide them accurate figures each time. There are some supplier invoices showing as unpaid from previous years, this year only a few credits and one invoice unresolved. In my admittedly limited experience most transactions hanging about after a year end relate to late payers or queried invoices.
I like to be organised & have a piece of paper to match everything & am figuring out how to tackle most aspects of this job. I can't help feeling a bit uncomfortable about these aged transactions. The accountancy firm they use has an excellent reputation so I presume it's not a problem from their point of view, I'd just prefer to have things tidied up!
I guess I will probably have to ask the accountant this question and maybe learn to live with it!
Thanks again for your time in responding.
It's Joanne btw
Where things are wrong:-
1)You don't match invoices to WorldPay transfers, you match them to the individual card payments, grab a download from worldpay, ensure your individual payments match what they have processed and reconcile the card 'bank' account to that worldpay summary. Worldpay is just the institution (like a bank) that processes the payments and they do not represent the payment itself.
Keep card payments processing via a separate 'card bank' in your software. When worldpay pay into your actual proper bank, then use that date to transfer from the 'card bank' to your current account. The time lag can be anything from next day to 6 days with worldpay, although mine are now all next day as a minimum.
That way you can see if card payments are missing. Does happen! You then complete a reconciliation to highlight any other potential errors and if you are on vat cash accounting then you pay vat on the correct dates, rather than potentially several days too late at certain times in the vat period (which can incur fines and penalties.)
2) you shouldn't be on vat cash accounting. You are a cash based business so the whole thing is pointless. You should be on standard vat.
3) I'm still unsure if you should be issuing so many Sales invoices and have anything on your debtor book unless you are offering terms or have just one 'cash account', because you haven't fully explained what it is they sell/business model so therefore I cannot comment much further. But other than a few who really need an account, or if they are B2b then there is no need for a vat invoice. The whole system sounds a right mess. (If you move away from sales invoicing for most and are using standard vat you still need to watch your processing timings carefully).
note.....tens of thousands of businesses have invoices lurking after the year end and it doesn't mean they should be cleared off the system, both suppliers and customers.
4) long o/s debtor book- ask the previous bookkeeper why this is so. Has the business changed their business model, profile of who they are seeking to etc? Was she allocating payments when made via PayPal/cards etc direct to sales account even though invoices were raised and bypassing the sales ledger control at the time of payment? If there were o/s debtors in her time why was she not chasing them? What is the quantum of the issue in your mind? Need to check 'materiality' issues (refer accountant). There must be a valid reason or it was just sloppy bookkeeping/control followed by sloppy accounting.
5) suppliers should be easier to find out independently. First ask for a statement and check it carefully. If it's still out, then ask for a full activity listing since xx date, back to 2015 if needs be. They can supply that, you might have to push, as they need to keep records for a lot longer under the HMRC regulations. Investigate discrepancies. Demand copy paperwork. Again perhaps entries were keyed straight to cash instead of the ledger. Worst case her is that the company reclaimed too much vat!!!!! So you may need to do a vat adjustment going back several years. So at best, again, sloppy practices. At worst restating the accounts and fines for errors.
Do the investigation, chat to the bookkeeper and go with your findings to the accountant, do not make changes for prior years, that's up to them. If they cannot be bothered sorting out the mess they have clearly let lie, albeit it could be because it's genuinely still due, then create new accounts and start again and leave the messy ones where they are. Simples. Then look for another job, from an ethical standpoint get yourself out of the firing line.
I'm so fed up with clearing up the sh*te left behind by supposedly good professionals, so I don't envy you this one.
__________________
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
Quick update, company accountant has emailed directors today with exactly the same queries. Am unsure of their exact response but they are surprised/horrified at the amount of unallocated transactions & have forwarded query on to previous bookkeeper! My ears are pricked & am sorely tempted to read email!
Quick update, company accountant has emailed directors today with exactly the same queries. Am unsure of their exact response but they are surprised/horrified at the amount of unallocated transactions & have forwarded query on to previous bookkeeper! My ears are pricked & am sorely tempted to read email!
Hi Christine
Whilst that is good to know, please do not let them fully blame the bookkeeper. The bookkeeper always gets the blame!
The Accountants are culpable based on facts given as this relates to those past years. So what questions have they been asking in the past about such old debt when they have looked at the closing debtor and creditor schedules against the trial balance? They should have been asking to get a feel around the bad debt situation as just one example.
It could be that the Director's dont care of course, that being the case I would be looking for another job.
If you have been copied in to the email, read it.
__________________
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
Joanne is correct. Everyone has passed the buck, and things not dealt with because no-one has taken charge to make sure things are kept tidy. I use Kashflow extensively, and have clients who have up to 5 different staff members/bookkeepers keeping it up to date, and things can get chaotic or forgotten.
At year end I insist we go through the debtors and creditors, bank etc., and make sure there is nothing historical outstanding. I have been known to reverse/write off rather than leave things sitting there..... I lock the accounts to stop backdating of transactions. Kashflow does not allow transactions corrected with a locked bank account from either the creditor or debtor accounts. But once locked, it has the facility, to select a bank transaction on the bank section. Options to post the transaction will suddenly appear, to a outstanding invoice or create one. Clients dont understand this, so its for bookkeepers & accountants to use!
