Forum

• # 69965
• Thu 31 Mar 2011 02:36 PM

Hi folks,

I have a situation where a client has written a cheque in 2010/11 for a bill that related to the previous year.  I understand that the invoice has already been processed but I do not have an accrual in the opening balances from the previous accountant to offset the payment against. I'm sure there must be a simple way around this but I just keep going round in circles!  Any help very gratefully received.  Phil  

• 
  Quote
  

• # 69966
• Thu 31 Mar 2011 02:41 PM

Hi Phil,

If the bill was for the previous year and not paid until the following year then I would imagine that the bill was still outstanding in the creditors. In this case you would:

Dr Creditors
Cr Bank

Hope that helps!

Meena

• 
  Quote
  

• # 69967
• Thu 31 Mar 2011 02:44 PM

Hi Phil

If the bill has already been processed then it should be in one of two places on the balance sheet either in the trade credtiors as an outstanding balance to be paid or if it was a bank payment as an outstanding payment on the bank rec.

If I were you I would track back to make sure the original bill has been processed.

What system do they use

Kind regards
Stuart

• Forum Moderator, South East & Greater London Regional Chairman
• 
  Quote
  

• # 69968
• Thu 31 Mar 2011 02:58 PM

Sorry, should have said, nothing in the creditors and as I said, no accrual either!  To be honest, the prior records are very vague, I just have a list of opening balances and not much else.  I am of the opinion that this invoice was never actually processed but my client thinks it was!  What is the procedure if I have to process it now?  Phil

• 
  Quote
  

• # 69969
• Thu 31 Mar 2011 03:12 PM

Hi Phil

How material is the bill i.e. is it a big bill that would have a material affect on the profit or is it a small invoice that will got "lost" in the transactions.

If it is for a non material amount then I would just process it through the books with a date as per the opening date of the year for the books you are working in.

If it is for a material amount you are going to need to investigate the records from the prior period as a post balance sheet adjustment may be required which will have to be done by his accountants.

Kind Regards
Stuart

• Forum Moderator, South East & Greater London Regional Chairman
• 
  Quote
  

• # 69970
• Thu 31 Mar 2011 03:21 PM

Thanks Stuart,

I will make further investigations!

Phil

• 
  Quote
  

• # 69972
• Thu 31 Mar 2011 03:42 PM

OK folks, I know you are on the edge of your seats  so here is the latest:

The bill in question was for £1,163.  I have just discovered that there was an accrual in place for this invoice - in the sum of £1,100; the previous accountant had estimated his bill apparently!!

Anyway, I can now deal with the accrual in the normal way and, as Stuart suggested, simply process the small balance in with this years books.

thanks for your help.

Best regards

Phil 

• 
  Quote
  

• # 69978
• Fri 01 Apr 2011 09:18 AM

Hi Stuart,

I would like to mention i really think the forum is interesting, and informative for everyone.

What i like the most is when members post these "situations"

Thanks for refreshing up my knowledge by using one of accounting Principle term MATERIALITY. Believe me or not I had a smile on my face as memories went back to my first interest in accounts.

Members keep on posting these situations i love them.
Stuart i like when you are being technical, keep it up.

Kind Regards,

Nathaliexxx

• Provide bookkeeping and virtual accountancy assistance service in English and French @nckaccountancy.
  West Essex Twitter:http://nckaccountancy.co.uk
  E-mail: info@nckaccountancy.co.uk
• 
  Quote