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Bookkeeping and Accounts - where to start?

Recently took on an accountancy role within a business with no system in place/backlog of accounts

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Background: I graduated with a degree in Accountancy and Finance back in 2015, going into a job as a junior accounts assistant within a medium sized PR company, working up to Finance Executive (in real terms - senior accounts assistant) but not being able to learn anymore within my team until someone leaves, I decided to part ways and took on a role as a Finance Manager / Bookkeeper / Accountant for a Shipping Company. The reason I have named all three roles, is because I will be undertaking the tasks of all.

The current situation is, the company has been trading for many years, with an external bookkeeper who uses VT accounts. He files the accounts by requesting the info required from the PA, however, I believe due to there being a lack of day to day bookkeeping on the ground, with no accountancy system to run the day to day sales invoices/purchase invoices/debt chase, this has led to gaps in information and the bookkeeper now being behind on the accounts. He has recently been took ill so since I joined the company 2/3 weeks ago, I have not been able to really see how he processes things, nor have I had access to the accounts.

I guess what I am asking is; for advise on a) how to figure out where to get started?! I believe I have every capability of tackling such a challenge and it is the very reason I wanted to leave my previous role. But I underestimated the transfer of moving from a role where systems were already in place, to moving somewhere which needs a system implemented. At the moment, all information is logged on an excel spreadsheet which isn't very reliable.

Requirements;
a) A way to link when a payment has come in from one company, to know then when to pay the other company and what for
b) To ensure that all sales invoices match contracts/charter parties
c) To ensure all sales invoices are paid on time and to manage queries on account efficiently and effectively
d) To be able to run the creditors/debtors ledger to know what is owed in/out
e) How can I know where to start the accounts with no previous information.

Any advise would be greatly appreciated, I am grateful that at the least the accounts are semi up to date and the external bookkeeper is extremely knowledgeable (from my understanding). But without being able to really chat with him and see where he is at. I am at a loss, and until I can speak with him I want to use my time wisely.

Thanks.

Replies (22)

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By WhichTyler
16th Oct 2018 12:05

If you don;t have access to the VT system you will need to set up an accounting system your self (possibly VTb but others are available) and start with what you do have (current bank balance/unpaid invoices files etc) and start building it up from there. Then glue it together with the old system when the bookkeeper recovers.

You may get angry suppliers asking why you need yet another copy invoice but this will pass now you are on the scene.

Then make sure you have enough information to put a VAT return together....

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Replying to WhichTyler:
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By newaccountantsf
16th Oct 2018 14:10

Thank you. That is very helpful, and also makes me think that it is possible to turn this around!

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Replying to newaccountantsf:
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By WhichTyler
17th Oct 2018 11:00

Another way of looking at it: Be professional.

this includes informing the directors of the problem, what you plan to do about it and what you will need to get the accounts up to date and compliant.

What you need may include new software, advice from external accountants (see below), time, support from directors in communicating with suppliers/customers/staff during transition etc. You have inherited the problem, that's not your fault. Your job is to identify a solution...

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By Accountant A
16th Oct 2018 12:10

You refer to a "new client" and then to taking on a "role". Are you an adviser or employee of the company?

Sounds like a challenge. Good luck!

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Replying to Accountant A:
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By newaccountantsf
16th Oct 2018 14:09

Ah yes - I have rectified that now to avoid confusion. I am an employee of the company..
Yes it is a challenge, thanks! :)

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Glenn Martin
By Glenn Martin
16th Oct 2018 15:28

First thing ditch the spreadsheet get Xero in plus receipt bank and use them to rattle through and get all invoices on the system so you can see where you at.

I wouldn't persist with VT either and dont wait for external bookkeeper just crack on and sort it out, during the process you will also learn top to bottom what goes on the business, so rapid learning curve but will make the job your own.

Took a job on as a client in similar circumstances

The first only way to get on top of it quickly is using good systens that will automate process going forward

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Replying to Glennzy:
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By newaccountantsf
16th Oct 2018 16:42

Hi Glenn, thank you for your advise. Hopefully there will be light at the end of tunnel, reassuring to know that others have been a similar situation. Unfortunately the bookkeeper does not want to move from VT so the reason I didn't put a new system in the first instance is to not duplicate processes. Is it possible to start in an automated system from a specific point of time whilst bookkeeper gets up to date and plug in the missing numbers at a later stage? Thanks!

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Replying to newaccountantsf:
Glenn Martin
By Glenn Martin
16th Oct 2018 16:53

From the last year end is the best place to start

Whilst the bookkeeper might not want to change surely it’s not his call
As of your there surely he will be surplus to requirements

Having offsite software is no good for your business and that is what matters not what the bookkeeper finds it easier to use

I do t think VT is MTD compliant so you will have to [***] on with bridging software so if looking at systems bite the bullet now

If you are new in your roll your employer will be be expecting you to lead on this don’t wait for others as if they let you down you will be left to get the flack

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Replying to newaccountantsf:
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By legerman
17th Oct 2018 14:16

newaccountantsf wrote:

Unfortunately the bookkeeper does not want to move from VT so the reason I didn't put a new system in the first instance is to not duplicate processes.

Cant you get the existing VT file from the bookkeeper and carry on where he was up to? You can download VTT+ from their website and it comes with a 60 day free trial.

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Replying to legerman:
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By newaccountantsf
17th Oct 2018 15:42

Hey Legerman, that is ideally what I wanted to do but he has been taken ill now and even before then he did not want to send over the file until he had got up to date.

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Replying to newaccountantsf:
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By legerman
18th Oct 2018 09:33

newaccountantsf wrote:

Hey Legerman, that is ideally what I wanted to do but he has been taken ill now and even before then he did not want to send over the file until he had got up to date.

In which case I would take Glenn's advice and go back to the last year end.

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Replying to newaccountantsf:
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By richardterhorst
19th Oct 2018 10:35

I would suggest you take charge. You are the accountant. If the bookkeeper does not want to join the party find someone new.

Good advice on the responses to get the directors on your side.

Its challenging but very rewarding when you have sorted it. Good luck.

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By andy.partridge
16th Oct 2018 15:11

If you are going to persist with an external bookkeeper, I would recommend moving to a cloud solution so there can be a much more collaborative approach.

The alternative is that the bookkeeping is managed in-house either with or without the external bookkeeper and either with or without VT.

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By frankfx
17th Oct 2018 19:01

Assuming it is a mess.

Get bank statements and transactions into Excel

One good way of getting oversight if accounts are a mess is to get a list of suppliers.

email them and request in excel /csv format a full transaction history for past X months , years.

The reports that can be run from these suppliers will make BATCH / bulk entry into accounting system a breeze.
VT makes VERY repeat very light work of this.

( entering individual invoices , credit notes and bank items is too time consuming)

You can run a match of bank payments ( excel ) with supplier payments.

a similar exercise can be done with PAYROLL transactions

With some thought and preparation records can be brought into shape without too much sweat.

VT may not be the end accounting system that you use............. but it is an excellent solution when incomplete records are the problem, as it exceptionally versatile and 'errors ' are easy to correct.

'error' sometimes transactions are placed in a holding or suspense account.. whist waiting clarification
these ''error'' transactions can be moved in an instant..... sometimes in bulk or batches . Magic.

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By Philosophic1
18th Oct 2018 14:05

As already suggested, you could go back to the last year end and do it your way from there on, using a cloud based solution. Clearbooks / Quickbooks, coupled with Receipt Bank / Auto Entry. Definitely look at what is good for the business, not the Bookkeeper.

It might speed things up if you can start from the last time the bank was reconciled, rather than the last year end.

Should be able to do most / all of it relatively quickly using bank statements, supplier activity statements (from the suppliers' end), and credit card statements (if any).

Once on top of it, continue putting your own in-house systems and controls in place; ensuring they can be followed by someone else if you were off for a period of time.

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7om
By Tom 7000
19th Oct 2018 10:06

Buy Xero and use that and slowy build up the various new accounts - putting procedures in place as you go.

Debt collection nd cash management first

If you can get a TB out of the old system that will help

The company accountants should be able to help - ie the ones that do the year end accounts....

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By pauljohnston
19th Oct 2018 10:46

Dont underestimate the size of the job and make sure your boss is told how long you estimate to get things running smoothly. Create an estimate in days and mutilpy by 2. If it takes less you will look good and if it does not this will allow you to deal with the hidden problems.

I am with the others in getting it on a cloud accounting package. THe original bookeeper says you cant have his file until it is upto date so you would be unwise to rely on him now or in the future. Since he was not upto date when he got ill so the position will be even worse now.

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By [email protected]
19th Oct 2018 11:15

I concur with the other posts
Go back to last known good record IE the last year end accounts - sounds like you're going to need to validate current year work anyway
Use either VT or other package of your choice (Quickbooks or Xero i'd suggest [used quickbooks, heard good things about xero])
bang in your invoices AP and AR and reconcile your bank
Key issue is going to be cashflow - so get on top of your AP and AR quickly
Ask the Directors for what you need, and own the balance sheet - if there's any skeletons, now's the time to deal with them!

Good luck

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By Andy Reeves
19th Oct 2018 12:42

The external bookkeeper is NOT "extremely knowledgable", and it not up to a bookkeeper to tell the owners what software they will and will not use. I am always suspicious where the owners are not able to access up to date information, and it can be a screen for invoice duplication. You will gain far more respect from your employers if you can advocate a solution that allows them to keep in touch with things more easily. As suggested Xero (or QuickBooks) should do all that you need.

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By reconynge
20th Oct 2018 11:05

Sadly, in our practice, this is an all-too common discovery when we get retained by a new client. Here is our process.

Irrespective of the package used, start a new Xero account. Fresh start, no hidden horrors to find, fix or both.
Roll back to the start of the financial year and up load the transactions
Likewise, get Receipt Bank integrated and send to RB the receipts & invoices. Methodically looking at the "paperwork" there will help you understand the expenses and give you a feel of what's going out
Back in Xero, figure out who owes/might owe your company money at the year-end, as a likely conversion balance, and then prioritise bank receipts and entry of invoices issued since y/e. This too will assist in understanding "where the money comes from"
Send customer statements out, with a "due diligence" covering email; be prepared for some flak. For the most part we have had nice responses
Integrate Chaser HQ to automate the credit control process

...and (finally) start working your way through the mess. Granted, as Xero dedicated practice, with accepted proposal, we are in control of who does what, and thus we don't have to worry about external staff trying to hold sway. Simply, stand your ground and plod through.

Hope this helps!
Best of luck

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By KrisKros
22nd Oct 2018 09:49

The answers so far have been great. I'd like to add a cautionary tale.

I advise extreme caution, there are lots of offerings out there, make sure you get all the information before pitching anything. We all have our preferences. Mine is quickbooks, but there are lots of differing packages. In this case MS dimensions may be a better fit, i'll let you research it yourself.

If we are being really snazzy then have a good look at Fathom reporting suite, that's down the line after you make an impact.

I have been in your situation, I proved myself to the directors first by generating big vat reclaims from missing invoices. Directors like getting big wads of cash back from HMRC, get the basics right before you change the wheels.

Start with the bank rec, when contacting suppliers they will tell you something has not been paid, particularly with recurring invoices at same values. request full statements of the history of all accounts. Match them off, locate missing invoices, request copies, cleanse the problems first

Then and only then try and change all the systems, in my humble and experienced view. Doing this as a practise accountant is one thing, doing it as an accountant within a business in another.

If you go in there dictating all the things wrong and how they need to change you will get laughed out the building and spit out quickly. At least thats what happened to me.

If you are calm and considered in your approach then maybe you will have greater success than I did.

Good luck!

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