How to Enter Opening Balances - Standard VAT

Transcription

1 How to Enter Opening Balances - Standard VAT Opening balances represent the financial position of your organisation on the day you start using Sage Accounts. Whatever date you choose, you are likely to have opening balances, whether your organisation is just starting up, or you are changing over from another accounting system. Without accurate opening balances the financial statements produced by Sage Accounts will not give a true picture of your financial position. Opening balances consist of information such as: Outstanding customer transactions. Outstanding supplier transactions. Nominal Ledger Trial Balance figures. Sage 50 Accounts and Sage Instant Accounts Plus - Product Record opening balances. Note: This article only applies if you are using the Standard VAT scheme. For further information about entering opening balances when you use the VAT Cash Accounting scheme, please contact Sage Support. If you are entering your opening balances using a date part way through your financial year, please contact Sage Support for an article relevant to this scenario. This article contains the following sections: To enter your customer or supplier opening balances - The customer and supplier opening balances can either be entered as lump sum balances, or as individual outstanding invoices and credits, which make it easier for you to match receipts later. To check the customer and supplier opening balances - Once you have entered your customer and supplier opening balances, before proceeding with this article, you should check that you have entered the correct values. To print the Trial Balance report - The Trial Balance report shows the balances of the postings made when you saved the customers' and suppliers' opening balances. This report is used when clearing the balances from the Debtors Control Account, Creditors Control Account and the Suspense nominal code. To clear the opening balances from the trial balance - After entering the customer and supplier opening balances, you should clear the values from the Debtors Control Account, Creditors Control Account and the Suspense nominal code. If you do not clear these balances, the values are duplicated when you post the nominal opening balances and your Balance Sheet report will be incorrect.

2 To enter the nominal and bank opening balances - You need to enter an opening balance for each nominal code and bank account that appears on your trial balance, including the Debtors Control Account, Creditors Control Account, Sales Tax Control Account, Purchases Tax Control Account and your bank accounts. When you post a nominal or bank opening balance using the opening balance option, Sage Accounts automatically post the opposite entry to the Suspense nominal code, 9998 by default. Note: If you are entering your opening balances at the start of your financial year, the trial balance should only consist of balance sheet values, for example, assets, liabilities and capital and reserves. To enter the bank opening balances through the Bank Record - You may want to use the Bank module rather than the Nominal module to enter the opening balances on your bank accounts. To check the nominal and bank opening balances - Once you have entered your nominal and bank opening balances, before proceeding with this article, you should check that you have entered the correct values. To check and back up your data - Once you have completed the opening balance procedures, you should check and back up your data.

3 To enter your customer or supplier opening balances Note: This procedure details entering customer opening balances, if you want to enter supplier opening balances, please replace customer with supplier as appropriate. 1. Open the Customers module, from the Links pane select Customer List then select the required customer account. Sage Accounts v11 and below - Open the Customers module then from the customer list, select the required customer account. The selected customer account is highlighted. 2. From the Customers toolbar, click Record, within the Balance box click O/B, then enter the relevant information to record the customer's opening balance, for example: Ref Date Type Gross Enter the reference for the opening balance, for example, O/BAL Enter either the set up date or the date of the original invoice or credit. From the drop-down list, choose the type of opening balance you want to enter, for example, either invoice or credit. Enter the full outstanding amount of the transaction here. Note: The date used must always be in the previous accounting period. For example, if you are entering your opening balances for financial year commencing January 2010, the opening balances must be dated December 2009 or earlier E.g. 31 December 2009 If required, to make another entry, press ENTER, then add the required information onto the next line. 3. To save the opening balance information, click Save. The opening balance transactions save and the Customer Record appears. 4. To close the Customer Record and return to the Customers window, click Close. Repeat this procedure for any other customers who have opening balances to be entered. Then follow this process again to add your Supplier opening balances.

4 You have now entered your customer and supplier opening balances. You should now refer to the following section to check that you have entered the correct opening balances. To check the customer and supplier opening balances Note: This procedure details checking the customer opening balances, if you want to check the supplier opening balances, please replace customer with supplier, and debtors with creditors. 1. Open the Customers module, from the Links pane select Reports then open the Aged Debtors reports folder. Sage Accounts v11 and below - Open the Customers module, click Reports then open the Aged Debtors reports. The aged debtors reports appear. 2. From the list of reports, print the Aged Debtors Analysis Detailed report. Use this report to check that you have entered the correct customer opening balances, and if necessary, amend any entries before proceeding. Now check your supplier opening balances by repeating the process and printing the Aged Creditors Analysis Detailed report from the Suppliers Reports window. You have now checked your customer and supplier opening balances. To print the Trial Balance report 1. Open the Company module, from the Links pane select Financials then click Trial. Sage Accounts v11 and below - Open the Financials module then click Trial. The Print Output window appears. 2. Select the required output, for example, Printer then click Run. The Criteria window appears. 3. From the Period drop-down list, choose the required Trial Balance period, for example, Brought Forward. If you selected the Printer Output, the Print window appears. 4. Complete the Print window as required then to print the Trial Balance report, click OK.

5 You have now printed your Trial Balance report, the information from this report is used in the following section. To clear the opening balances from the trial balance Note: In this example, the following balances are to be cleared from the trial balance. N/C Name Debit Credit 1100 Debtors Control Account Creditors Control Account Suspense Account Total Open the Company module then from the Tasks pane select New Journal. Sage Accounts v11 and below - Open the Nominal Ledger then click Journals. The Nominal Ledger Journals window appears. 2. Enter a reference and date for the journal, then enter the relevant information to reverse the trial balance figures, for example: N/C Details T/C Debit Credit 1100 Reverse O/Bal T Reverse O/Bal T Reverse O/Bal T Note: The date must be in the same accounting period as the customers and suppliers opening balances. For example, if you are entering your opening balances for financial year commencing January 2010, the opening balances are dated December 2009 or earlier and this journal should be dated 31 December To save the journal, click Save. The journal posts and the Nominal Ledger Journals window clears. 5. To close the Nominal Ledger Journals window and return to the Nominal Ledger window, click Close.

6 You have now cleared the balances from the trial balance, and are ready to enter the nominal and bank opening balances. For further information about this, please refer to the following sections. To enter the nominal and bank opening balances Note: The bank opening balances can be entered either via the Bank Record or the Nominal Record. Follow this procedure to post your bank opening balance via the Nominal Record. To enter the bank opening balances via the Bank Record, please refer to the following section To enter the bank opening balances through the Bank Record. If your bank opening balance consists of both reconciled and unreconciled amounts, please contact Sage Support for further assistance. 1. Open the Company module, from the Links pane select Nominal Ledger then select the required nominal code. Sage Accounts v11 and below - Open the Nominal Ledger module then select the required nominal code. The selected nominal code is highlighted. 2. From the Nominal Ledger toolbar, click Record, click O/B then enter the opening balance information into the Opening Balance Setup window, for example: Note: The O/B button is part of the Balance box. Ref Date Debit Credit Enter a reference. This appears on the audit trail and helps you to identify the transaction. O/BAL is entered by default but can be amended. Enter the date. This should be the last day of your previous accounting period. If the trial balance figure is a debit value, enter the amount here. If the trial balance figure is a credit value, enter the amount here. Tip: Debit balances usually include, fixed assets, bank accounts that are not overdrawn, purchases and overhead accounts such as electricity charges. Credit balances usually include, loans, overdrawn bank accounts and income accounts such as sales. 3. To save the opening balance, click Save. The opening balance is saved and the Nominal Record appears. 4. To close the Nominal Record and return to the Nominal Ledger window, click Close.

7 Repeat this process until you have entered all of your Nominal Ledger opening balances. You have now entered the nominal opening balances, if you have also entered the bank opening balances, then please proceed to the section To check the nominal and bank opening balance later in this article. To enter the bank opening balances through the Bank Record Note: If you have already entered your bank opening balances through the Nominal Record, you must not enter them again using this procedure, but proceed to the following section To check the nominal and bank opening balances. If your bank opening balance consists of both reconciled and unreconciled amounts, please refer contact Sage Support. 1. Open the Bank module, select the bank account for which you want to enter an opening balance then click Record. The Bank Record appears. 2. From the Bank Record, click O/B then enter the opening balance information into the Opening Balance Setup window, for example: Note: The O/B button is part of the Current Balance box. Ref Date Receipt Payment Enter a reference. This appears on the audit trail and helps you to identify the transaction. O/BAL is entered by default, but can be amended. Enter the date. This should be the last day of your previous accounting period. If you have money in this account this is a debit balance, and should be entered here. If you are overdrawn in your bank account, this is a credit balance, and should be entered here. 3. To save the opening balance, click Save. The opening balance is saved and the Bank Record appears. 4. To close the Bank Record and return to the Bank Accounts window, click Close. Repeat this process until you have entered all of your bank opening balances. You have now entered the bank opening balances, should now proceed to the following section.

8 To check the nominal and bank opening balances 1. Open the Company module, from the Links pane select Financials then click Trial. Sage Accounts v11 and below - Open the Financials module then click Trial. The Print Output window appears. 2. Select the required output, for example, Printer then click Run. The Criteria window appears. 3. From the Period drop-down list, choose the required Trial Balance period, for example, Brought Forward. If you selected the Printer output, the Print window appears. 4. Complete the Print window as required then to print the Trial Balance report, click OK. Use the figures from this trial balance to check that you have posted all your nominal and bank opening balances. You should also ensure that the Suspense nominal code balance is zero. If it is not, print the Nominal Activity report and check for the following: All nominal opening balances from your trial balance have been entered. None of the opening balances have been entered twice. Balances have not been entered as debits when they should be credits, and vice versa. You have now entered your customer, supplier, nominal and bank opening balances. You should now check and back up your data as detailed in the following section.

9 To check and back up your data Run the Check Data option to check the validity of your data files. This option should always be run before taking a backup of your data. For further information about this, contact Sage Support. After checking your data, you should take and keep at least one backup of your data files. This ensures that in the future you can restore back to this point. You may want to do this to check the values or details of your opening balances. You have now completed the opening balance procedure, and can start entering transactions into Sage Accounts. Author: Sage 50 Support Team Product & Version: Instant V15, V16. Sage 50 V2009, V2010, V2011 Revision Date: Aug 2010 Publication Number: 11232