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Moving between accounting system questions

TomB

TomB

New Member
Hello All,

I have a hopefully very quick question.

I'm currently using Microsoft Office accounting, but it's too heavy duty just now for me, so I'm moving to an simpler system.

I thought best time to do that would be end of my financial year which is April 5th.

One question I do have is that on the end of the financial year I will have invoice with outstanding amounts, they are on an agreed payment plan.

Now my accounting software has already counted the full invoice value in my profit and loss, so how can I keep my new accounting software correct in terms of payments received for bank recs etc without the income being counted twice.

Or would it be better to cancel the outstanding amount at end of financial year and log it as a new invoice in the new accounting software?

Thanks!

Tom
 
Scottish Business Owner

Scottish Business Owner

New Member
Hi Tom,

When you get to the 5th of April the accounting package should be able to provide a trial balance. You should make sure that you are happy with this (i.e that you've reconciled the bank etc). You should use this closing TB as the opening TB in your new system. Part of the TB will include a debtors figure which again you just need to replicate the closing balance in the new system.

Essentially before doing any transactions in the new system you should make sure that both trial balances agree so that you have the correct starting position. This may sound more complicated than you think but I would expect the TB to have very few lines on it anyway.

Do you know what package you are switching to? Happy to offer help where I can :)
 
Mike Lewis

Mike Lewis

New Member
Now my accounting software has already counted the full invoice value in my profit and los,
Well, if that's the case, then there's something wrong.

What should happen is that the software (or you) should apportion the invoice value between sales/purchases on the other hand, and debtors/creditors on the other.

If your question refers to your sales invoices, then the part of the invoice that belongs to the current year should be listed as a sale, and the balance should be regarded as a debt - something you owe the customer. That's because you've already been paid for the product, but you haven't delivered it yet.

Conversely, if you are referring to purchase invoices, then the reverse is true. This typically happens with things like phone bills that you pay in advance. The amount that belongs to the current year is part of your operating expenses, and the balance is something that the supplier owes you.

Either way, as rightly says, the trial balance should identify the amounts in question. When you start the new financial year, you need to bring those amounts forward into the new system. Then, during the course of the new year, the amounts should gradually reduce to zero, as the product is delivered or the service consumed.

In other words, once you know the amount that needs to be apportioned to the new year, it is treated just like any other brought-forward balance.

Mike
 
Last edited by a moderator:
TomB

TomB

New Member
Hi ,

Thanks for the reply. How re things with you going?

I was planning to switch to brightbook.co.uk it's a free online simplified package.

Microsoft Accounting is just a bit too complicated and does everything other than my ironing.

I just wanted something simple, free and easy to use which is why I though brightbook.

The other option was TasBasics but like Microsoft accounting it looks like it has far too many options.

BrightBook doesn't look like it has trial balance option, it is quite basic.

I'm happy to have all my old accounts information in the old software and just start fresh in the new software.

What do you think?

Thanks

Tom
 
Last edited by a moderator:
TomB

TomB

New Member
Well, if that's the case, then there's something wrong.

What should happen is that the software (or you) should apportion the invoice value between sales/purchases on the other hand, and debtors/creditors on the other.

If your question refers to your sales invoices, then the part of the invoice that belongs to the current year should be listed as a sale, and the balance should be regarded as a debt - something you owe the customer. That's because you've already been paid for the product, but you haven't delivered it yet.

Conversely, if you are referring to purchase invoices, then the reverse is true. This typically happens with things like phone bills that you pay in advance. The amount that belongs to the current year is part of your operating expenses, and the balance is something that the supplier owes you.

Either way, as rightly says, the trial balance should identify the amounts in question. When you start the new financial year, you need to bring those amounts forward into the new system. Then, during the course of the new year, the amounts should gradually reduce to zero, as the product is delivered or the service consumed.

In other words, once you know the amount that needs to be apportioned to the new year, it is treated just like any other brought-forward balance.

Mike
Hi Mike,

We must have posted at the same time :)

It's invoices that for my clients, the work has already been completed in full in this financial year which is why it's been counted in full in my sales, however they are paying in instalments.

I may just stick with microsoft accounting, will make a decision before the end of the financial year.

Thanks!

Tom
 
Last edited by a moderator:
Mike Lewis

Mike Lewis

New Member
... the work has already been completed in full in this financial year which is why it's been counted in full in my sales, however they are paying in instalments.
In that case, things are much simpler. You don't need to do anything special. In the old system, the outstanding amounts should be included in the debtors figure as a matter of course. You just pick up the closing debtors from the old system, and enter it as the new debtors in the new system.

I may just stick with microsoft accounting
If you find Microsoft too complicated, then it makes perfect sense to ditch it in favour of something simpler. Don't let this relatively minor issue put you off doing that.

Mike
 
stugster

stugster

Active Member
Verified Member
Have a look at Solar Accounts, Tom.

It's pretty sexy ;)
 
G

Gouldie0

New Member
I'm another who would recommend Solar, it's priced really well and will do as much as you want it too. By that I mean you can make it as simple or as complicated as you like as it's a very versatile accounting system.

One question I would like to ask is, why wait until the end of the accounting year to change an accounts package?

If you do it as has suggested above, which is the way I would do it, it shouldn't have any implications on your accounts in the new software.

Cheers

Neil
 
Last edited by a moderator:
TomB

TomB

New Member
Hi everyone,

Thanks for all the replies. I think I decided in the end to move to brightbook for one of my businesses and it is very straightforward bookkeeping and brightbook will cope with it.

For my other business I'm sticking with Microsoft account, partly because I know it works and partly because I'm too much of a cheap skate to pay for accounting software when I have a full working version that didn't cost me anything :)

And also as new business I'm setting up will be stock orientated I thought Microsoft accounting would be ok for that.

I do has TASBasics as well, but the home page always shows $ instead of £ which just annoys me, even though the rest of the website has £ signs.

Thanks

Tom
 

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