How to convert closing balances

Converting closing balances from manual records to new automated accounts system

Didn't find your answer?

Hello

Have a problem as no TB has been provided as yet from Accountants based on  manual accounts set up on spreadsheets and databases etc up to end of financial year ie 30th June. This involved debtors, creditors, bank, account, wages control,

So my new accounts records start from 1st July ie there are no balances as they are all on old manual system and am wondering how i deal with opening balances as there is no TB as yet, I do have opening debtors balances and bank balance but what journals do i do until the TB is ready

Replies (8)

Please login or register to join the discussion.

RLI
By lionofludesch
23rd Jul 2017 11:37

1. Open up an account for the year just ended.

2. Enter any unpaid sales invoices on their real dates of issue.

3. Do the same for any purchase invoices.

4, Journal in the closing bank balance.

5. Close off the old year and discard it. It's rubbish.

6. You'll now have a bank account, sales ledger and purchase ledger that you can work with in the new year.

7. The other balances aren't so urgent and you can deal with them later.

8. Simpuls.

Thanks (1)
Replying to lionofludesch:
avatar
By Alan French
23rd Jul 2017 16:31

Thankyou very much for info

I have entered unpaid sales invoices etc as at the end of old year and dated at the original dates, when I debit the bank with the bank balance with a journal what would be the credit entry ? would it be suspense?

Thanks (0)
Replying to Alan French:
Scalloway Castle
By scalloway
23rd Jul 2017 20:47

I would use a suspense account for any differences. It should end up being zero when you have all the information for the opening trial balance.

Thanks (0)
Replying to scalloway:
avatar
By Alan French
23rd Jul 2017 23:10

Thanks

Just another couple of queries.

It is a new accounts package at the start of a new financial year so there are no previous figures on this package, so is it correct to have just opening balances which are on a manual system at the moment. So hopefully these can be entered by journals on the present system.

With ref to opening sales debtor balances with a cash accounting vat scheme what would be the credit balance if these are debited to debtors control.

Thanks (0)
Replying to Alan French:
Scalloway Castle
By scalloway
23rd Jul 2017 23:36

Yes just journal in the closing balances from the manual system when the accounts are closed. Use a suspense code as you will already have set up some balances for bank, debtors and creditors when you first started using the new system. The suspense account should balance to zero when you are complete.

The opening sales invoices should be entered with their correct balance in a previous accounting year. The other entry will be suspense.

I have not used cash accounting for VAT on a computerised system so I can't give you a definitive version but I would assume how you deal with VAT will be in the software manual. You could have a trial run then revert to a previous backup.

They seemed to change accounting systems every couple of years where I used to work so I had the process down to a fine art when I left.

Thanks (0)
Replying to scalloway:
avatar
By Alan French
24th Jul 2017 22:27

Much appreciated.

The confusing thing is that as you know a number of invoices make up the sales debtor opening balances and these were entered with the original dates, as this was a cash accounting system, ie unlike normal standard accounting VAT where balances are posted as gross totals these were posted with nett and vat separate, so the entries have been posted as a debit to debtors control and one credit to sales output tax and another credit to suspense. It leads me to believe that sales output tax has been duplicated ie as within those debtor opening balances the original invoices have been posted with also a credit to output tax. Everything I have read on cash accounting does say that opening debtor balances must be entered with vat, so as to match future sales receipts, and as you may know cash accounting is based on vat paid on sales receipts but thanks very much for your comments.

Thanks (0)
Replying to Alan French:
RLI
By lionofludesch
25th Jul 2017 07:27

Alan French wrote:

Much appreciated.

The confusing thing is that as you know a number of invoices make up the sales debtor opening balances and these were entered with the original dates, as this was a cash accounting system, ie unlike normal standard accounting VAT where balances are posted as gross totals these were posted with nett and vat separate, so the entries have been posted as a debit to debtors control and one credit to sales output tax and another credit to suspense. It leads me to believe that sales output tax has been duplicated ie as within those debtor opening balances the original invoices have been posted with also a credit to output tax. Everything I have read on cash accounting does say that opening debtor balances must be entered with vat, so as to match future sales receipts, and as you may know cash accounting is based on vat paid on sales receipts but thanks very much for your comments.

You can, of course, test this by running a VAT return for a current period, say, July, before you enter any receipts from debtors. Output tax should be zero.

Having said that, debtors should appear gross, whether or not the VAT is due to HMRC. Nothing in your post leads me to believe that output tax is being duplicated.

Thanks (0)
Replying to Alan French:
RLI
By lionofludesch
24th Jul 2017 07:32

Alan French wrote:

Thanks

With ref to opening sales debtor balances with a cash accounting vat scheme what would be the credit balance if these are debited to debtors control.

The software should do this for you. That's why you are entering the invoices on their original dates.

Just make sure the flags are set for cash accounting before you start.

Thanks (0)