Following on from my post the other day regarding " sales invoices or not" i now need to pick someones brains.
After sitting down and looking through the accounts i have discovered quite a few mistakes and i think to combat these mistakes then they need to generate an invoice each time. Because a lot of customer pay a cheque on the day they do not want to generate an invoice to then have to post a payment against it. So my next thought is cash sale. However when posting a cash sale the payment is set to the date of the cash sale. This client banks their cheques every week and sometimes longer so when it comes to reconciling the bank i think they are going to get really confused. I did think about creating a cash sales nominal code and setting the cash sales to this bank account and when the client posts the bank transactions to Sage they could transfer the from the Cash sales n/c to the standard bank account. But again i think this would really confuse the client.
Other than batch invoice and posting a sales receipt what other options do i have where i can ensure they are invoicing all of there customers and all invoices are being paid.
Your customer doesn't want to issue invoices to all, nor do they need to invoice all, so why are they being forced down this route? This is an additional administrative burden to them, albeit I can see some advantages for control.
That said there are other ways to gain back control, surely.
What mistakes? Why are mistakes being made? Is the Accounts person not really an Accounts (I've trained) person but just someone who got landed with the job?
Crucially, are they anywhere near to be close to the vat threshold? Or likely to hit it?
Why are they taking cheques still, plus why cash? (Two of the most costly processes). Who takes the card payments? The cleaners or the head office? At what point? Same day, next day, whenever someone remembers? How do these get reconciled? Is some of the cash used for expenses? How do they deal with such expenses? Are these included in this spreadsheet? So then how do they reconcile and control the cash? Is the spreadsheet in the form of a cash analysis book, with eg folios that can be used to cross reference their bankings?
If they do issues invoices for all, is this now going to be processed via this new sage? How many folk will require access/what level of access/how many user licences do they have?
If using some other software, hamann invoices are involved for the cash accounts v credit accounts?
Just kind of ruminating out loud.
Processes for accounting will depend a lot of processes within the business.
__________________
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
All invoices raised in sage. Credit accounts in their name. All cash accounts via one account styled cash account.
Produce cash account invoice....add name of client after words cash account. (Just easier to trace in event of a query).
Print one invoice for cash account, get staff to hand write on how paid. If card, still write it on and attach card receipt. Reason I say write it on, cos card receipts get lost. Print two for credit customer, one to customer, one to accounts as cash invoice. (Or email the credit customers, save on paper.
Post invoices.
Better still......two part receipt book for cash clients. Rest in sage. Post invoices. Batch version two part book items.
Three bank accounts in sage. One actual normal bank. One styled cash/Cheque receipts. Last one. Red card receipts.
Process payments on card to card receiots bank, using date on card slips, (Customer receipt option in sage). Reconcile to card merchant reports)
Process cash/Cheque receiots to that account (cust receipt option) on date of receipt Ensure list of banking breakdown retained re each payin.
Do bank transfer when card company pay into bank (Rec via same card merchant report). Bank transfer re cash/cheques paid in, on date of Payin. Check to payin details to ensure bank not lost anything. Recconiliations to cash count (daily, weekly, whatever). You may need to intro some extra checks/controls for spend.
Hope that makes sense.
__________________
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
Your customer doesn't want to issue invoices to all, nor do they need to invoice all, so why are they being forced down this route? This is an additional administrative burden to them, albeit I can see some advantages for control. -
That said there are other ways to gain back control, surely.
What mistakes? Why are mistakes being made? Is the Accounts person not really an Accounts (I've trained) person but just someone who got landed with the job? Most common mistakes i came across yesterday are customers being invoiced when they have already paid and customers being marked as paid when they haven't paid. Some of these mistakes date back to months. Accounts person has been with them 15 years and has apparently worked in accounts many years prior to this.
Crucially, are they anywhere near to be close to the vat threshold? Or likely to hit it? - No where near vat threshold and wont hit any the threshold any time soon.
Why are they taking cheques still, plus why cash? (Two of the most costly processes). Who takes the card payments? The cleaners or the head office? At what point? Same day, next day, whenever someone remembers? How do these get reconciled? Is some of the cash used for expenses? How do they deal with such expenses? Are these included in this spreadsheet? So then how do they reconcile and control the cash? Is the spreadsheet in the form of a cash analysis book, with eg folios that can be used to cross reference their bankings? - They don't accept card payments. Staff will come back from clean with either cash or cheque and will have wrote next the customer amount paid and method. Accounts person will then log daily work on a spreadsheet which has cash, cheque and np payment column. Cash and Cheque columns are totalled for the week.
Any outstanding payments are then recorded on an A4 piece of paper for the month for each customer. There is around 20 customers on the sheet of paper and there can be upto 5 dates for each customer. Once the customer has paid for one of the cleans a bacs date will be made next to the relevant date. It is very messy and if they are trying to trace a payment it takes them forever and this is where they are making a lot of mistakes. At the end of the month they will invoice any outstanding debt from this sheet/s of paper. I dont know how they get by with it because you cant make sense of anything.
They log into the bank every few days to see who has paid and then they will update the spreadsheet for the customsn't pay on the day. Cheques can take a upto a week to bank. I couldn't see anywhere where they were cross referencing anything to the bank so if a cheque got lost prior to banking then they wouldn't know.
If they do issues invoices for all, is this now going to be processed via this new sage? How many folk will require access/what level of access/how many user licences do they have? - Currently the owner wants to process the invoices and i will process the bank. Accounts person is not prepared to use Sage (very stubborn person)
If using some other software, hamann invoices are involved for the cash accounts v credit accounts?
Just kind of ruminating out loud.
Processes for accounting will depend a lot of processes within the business.
All invoices raised in sage. Credit accounts in their name. All cash accounts via one account styled cash account.
Produce cash account invoice....add name of client after words cash account. (Just easier to trace in event of a query).
Print one invoice for cash account, get staff to hand write on how paid. If card, still write it on and attach card receipt. Reason I say write it on, cos card receipts get lost. Print two for credit customer, one to customer, one to accounts as cash invoice. (Or email the credit customers, save on paper.
Post invoices.
Better still......two part receipt book for cash clients. Rest in sage. Post invoices. Batch version two part book items.
Three bank accounts in sage. One actual normal bank. One styled cash/Cheque receipts. Last one. Red card receipts.
Process payments on card to card receiots bank, using date on card slips, (Customer receipt option in sage). Reconcile to card merchant reports)
Process cash/Cheque receiots to that account (cust receipt option) on date of receipt Ensure list of banking breakdown retained re each payin.
Do bank transfer when card company pay into bank (Rec via same card merchant report). Bank transfer re cash/cheques paid in, on date of Payin. Check to payin details to ensure bank not lost anything. Recconiliations to cash count (daily, weekly, whatever). You may need to intro some extra checks/controls for spend.
Hope that makes sense.
In addition to there other spreadsheets they generate a sheet which shows customers details, hours, rate ect. I suggested that they created a column to mark as "Paid", Method of payment and a third column to reconcile with the bank. Which would have been sufficient and would of meant that they didnt need to generate an invoice for everyone. But my suggestion was dismissed because it would be too much trouble to update the sheets each day on the computer. I cant see it being any more work that what they are having to do now. Again this is all down to the accounts person who keeps dismissing possible solutions.
Im not entirely sure that the accounts person wants to change to using Sage. But they cannot carry on dong their accounts manually. This client has lost customers because of the way the issue invoices but i wont go into that.
In addition to there other spreadsheets they generate a sheet which shows customers details, hours, rate ect. I suggested that they created a column to mark as "Paid", Method of payment and a third column to reconcile with the bank. Which would have been sufficient and would of meant that they didnt need to generate an invoice for everyone. But my suggestion was dismissed because it would be too much trouble to update the sheets each day on the computer. I cant see it being any more work that what they are having to do now. Again this is all down to the accounts person who keeps dismissing possible solutions.
Im not entirely sure that the accounts person wants to change to using Sage. But they cannot carry on dong their accounts manually. This client has lost customers because of the way the issue invoices but i wont go into that.
Hi Nicola
Just my thoughts but the owner needs to start getting tough on the accounts person. I can, at a stretch, understand they may be reluctant to use Sage, but for Pete's sake, updating a spreadsheet once a day?
I may have a possible spreadsheet solution which will do away with her having to keep details on a scrap of paper and produce an invoice when required, are they a sole trader or Ltd Co?
I would also suggest that a sales invoice is raised the same day of the clean if the customer hasn't paid which will give them a tighter control on what's outstanding.
__________________
John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
In addition to there other spreadsheets they generate a sheet which shows customers details, hours, rate ect. I suggested that they created a column to mark as "Paid", Method of payment and a third column to reconcile with the bank. Which would have been sufficient and would of meant that they didnt need to generate an invoice for everyone. But my suggestion was dismissed because it would be too much trouble to update the sheets each day on the computer. I cant see it being any more work that what they are having to do now. Again this is all down to the accounts person who keeps dismissing possible solutions.
Im not entirely sure that the accounts person wants to change to using Sage. But they cannot carry on dong their accounts manually. This client has lost customers because of the way the issue invoices but i wont go into that.
Hi Nicola
Just my thoughts but the owner needs to start getting tough on the accounts person. I can, at a stretch, understand they may be reluctant to use Sage, but for Pete's sake, updating a spreadsheet once a day?
I may have a possible spreadsheet solution which will do away with her having to keep details on a scrap of paper and produce an invoice when required, are they a sole trader or Ltd Co?
I would also suggest that a sales invoice is raised the same day of the clean if the customer hasn't paid which will give them a tighter control on what's outstanding.
Hi John
The accounts person claims to have used Sage in previous positions so i really do not understand why the reluctance. The spreadsheet solution is ideal but i cannot force them to use it. They are a a Ltd Company. There would be around 80 invoices per week to generate so the more i think about it the more i think cash sale invoice posted straight to a cash, cheque account is the option. They are tripling their entries at the minute anyway so i cant see adding everything to Sage taking any more time than it currently does.
Yes, if you could email me the spreadsheet that would be very much appreciated. I just then need to persuade them to embrace change.
-- Edited by Nikole on Saturday 5th of October 2019 08:28:38 PM
Ah, the spreadsheet solution I had in mind is more geared to someone self employed. It's not mine, sorry if I gave that impression, but the bank and cash side together with the self generating invoice bit might work for them. Have a look anyway, I've used their taxi package for my first client when I started back in 2009 until they outgrew it and it was a very good piece of kit. I thought of them this morning when I was thinking of your issue https://www.diyaccounting.co.uk/Self-Employed-Product.do
I wouldn't suggest that every clean is invoiced, only those who haven't paid on the day.
I'm also thinking that VT Transaction+ would work well here as well, although it's £75 + VAT a year. You could create a bank for cheques and a bank for cash (as per Joannes suggestion upthread) and then just transfer to current account when banked. Then just create invoices for the rest with its built in invoice program. When client sends cheque just record it in the cheque bank account and if by bank transfer directly in the current account.
__________________
John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi John,
They would have around 17 invoices per day to generate. I'd say the majority of those could be via batch invoice so I really don't thi lnk it's smh mors time consuming than there process at the minute. At least we know that everything is accounted for and credit control will be alot tighter.
I'm speaking to the client tomorrow and I'm sure when I present the most recent mistakes I have discovered they will be more than happy to record everything.
Agree with John - your biggest hindrance for any of the methods is the existing Accounts lady.
Two likely reasons for this, well three - she is petrified of change/doesnt want to look a fool by asking how to do something (when in her head she has been doing the job for 20 years); she is worried that the automation will end up in her losing her job or she is just stuboorn.
Only way to get the changes through, whatever they are is by getting the boss to sign from the same hymn sheet as you and the Accountant, which doesnt sound 100% do-able and then doing a complete 'idiots' guide cover4ing off different scenarios and doing some serious hand holding and dummy runs on the software where it cannot cause damage. Ive had one of these, in this case just someone who is not used to change/not confident in anything new, but with the right kind of handholding/in small doses, with practice on the system (practice mode is great for this) has turned into an absolute star.
How did you get on at the clients?
__________________
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
I had experience, not very different, where is transpired a long standing member of staff was stealing. Wanting to avoid doing something that makes your life easier is suspicious Not saying they definitely are, but processes to reduce the risk, like suggested need to be implemented, very difficult for you to even suggest the possibility.
I had experience, not very different, where is transpired a long standing member of staff was stealing. Wanting to avoid doing something that makes your life easier is suspicious Not saying they definitely are, but processes to reduce the risk, like suggested need to be implemented, very difficult for you to even suggest the possibility.
Not necessarily suspicious in this case, given the full background across both posts. It is questionable, to the current staff, that the new processes suggested will in fact make their life easier.
__________________
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
Agree with John - your biggest hindrance for any of the methods is the existing Accounts lady.
Two likely reasons for this, well three - she is petrified of change/doesnt want to look a fool by asking how to do something (when in her head she has been doing the job for 20 years); she is worried that the automation will end up in her losing her job or she is just stuboorn.
Only way to get the changes through, whatever they are is by getting the boss to sign from the same hymn sheet as you and the Accountant, which doesnt sound 100% do-able and then doing a complete 'idiots' guide cover4ing off different scenarios and doing some serious hand holding and dummy runs on the software where it cannot cause damage. Ive had one of these, in this case just someone who is not used to change/not confident in anything new, but with the right kind of handholding/in small doses, with practice on the system (practice mode is great for this) has turned into an absolute star.
How did you get on at the clients?
Hi Joanne
The client decided they didn't want to generate an invoice for every single clean, so i advised them to have a system in place for tighter controls to ensure they weren't losing money through poor credit control. They have taken on board my suggestion and as long as they stick to this suggestion they will/should no longer lose money from non paying customers. The accounts person is still not wanting to use Sage so i am now assisting the client with the basics of Sage and so far progress is good.
Sounds like positive steps in the right direction Nicola, thanks for the feedback.
Ditto.
I meet that 'but we have always done it this way and it works' mantra on a daily basis. Oh but they forget - it doesnt work does it. Plus there may be better ways. You cant always teach an old dog new tricks, until that old dog has died!
__________________
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
