I'm working with a manual cashbook, taking over from a previous bookkeeper. My question I'm sure has a simple answer, my problem caused by blank brain and also the ever present fact that what you learn in education never really reflects the situations existing in the real world!
I'm aware of how double entry accounts should be when all prim and proper and up to date. Not aware however of how to turn a shamble of incomplete information etc into the prim and proper article!
So the cashbook has no balance and has none for a quite a few years back. Each month has columns totalled, but none brought forward and no monthly reconciliations. Where and how should I start in getting the books back to balance in order to from now on have the records correct? Any other related thoughts I should be aware of will be appreciated too.
Learning how to turn incomplete records into correct accounts is going to be a good thing for me, bridging the gap between ideal accounts and the real world state of inherited accounts from owners who have attempted the books themselves.
The only thing I could think of on a day where I need more sleep/coffee to concentrate is to first balance the receipts & expenditure. Then go back through the statements to work out which chqs haven't been cashed yet. Add back or take those off your balance according to whether its a debit or credit balance. Then the difference between the bank statement and cashbook balance would have been the brought forward balance for the month had it previously been done. Anywhere near right?!
Tried to research this, but all results were how to do things right from the start, rather than how to pick things up from an incomplete stage.
I think it may all depend on whether the accounts have been completed for any of the periods which you have infront of you?
If not, then I guess you would be going back to square one. If you do have a starting point, go from there, although you may have to have an adjusting figure to start with if you do not have a bank rec to match with, as the accounts would have been completed and finalised. I agree with your starting point to balance all the figures and then try to do a bank rec etc etc
It all depends on how much work you want to do and whether you will get paid for it all?
I agree with P that the previous accounts has to be your starting point.
I take it that their Accountant must take the books from cashbook stage and perform the reconciliation, adjustments and prepare the accounts? I would start with contacting the accountant, and asking for the bank/cash reconciliation summary, reconciled debtors list, creditors list etc before you perform any additional work as having this will make your life so much easier.
I have a similiar problem at the moment. A set of trial balance figures for year end 31.03.09 but the client decided that they didn't like the fact that the previous book-keeper had made adjustments etc on Sage and deleted the lot and bought a new version of Sage to download, but have never actually done it. They have been doing their VAT return by just adding up the receipts and expenses from the Bank Statement for a year, and have done no other accounts. I really haven't the time or inclination tbh to try ,and sort out the mess as they put through hundreds of small receipts and just say they are for Sales Sundries (to give you some idea I did their last VAT Qtr reconciliation by spreadsheet and it took me 12 hrs there were so many receipts and invoices in no particular order). Their answer when I politely asked why they didn't get a Bookkeeper sooner " well we have had six and we didn't like the way they allocated the receipts to certain codes" decipher from that what you will! Any idea for a quick fix greatfully received.
i think the only quick solution is if they have/had an accountant for the end of year who you could ask for the opening balances for the new financial year.apart from that it is the entering all data...and for the future if you want to keep them as your client probably you better off showing them the chart of accounts before you start to do anything otherwise you might become the seventh :) the accountant might have a copy or backup of the deleted previous sage data as well
