Isle Abbotts Village Hall

Transcription

1 Isle Abbotts Village Hall Accounting Procedures Owner: - Isle Abbotts Village Hall Management Committee Author: - D.C. Bradshaw Version: Release date: - January 1st, 2013

2 Revision History January 1st 2010 Initial Release January 1st 2012 Release 1.20 January 1 st 2013 Release 1.30 This package is created assuming that the users have a reasonable understanding of Windows and are able to open and close applications and copy and rename files. If you are not reasonably well versed in the use of Windows then please ensure you have someone who is available to get you started.

3 Introduction The purpose of this document is to provide the village hall treasurer with a simple easy to follow set of instructions to:- 1. Install the software on a Personal Computer with a Windows operating system. 2. Load the master database into the Accounting Software. 3. Understand the data structure within the accounting Software. 4. Enter data into the appropriate accounts/classes. 5. Prepare invoices and receive invoice payments. 6. Transfer payments between accounts. 7. Reconcile Bank Statements 8. Produce financial reports for Committee Meetings. 9. Undertake Year End Processing. 10. Produce a set of Auditable accounts for review and comment by the independent reviewer. 11. Present accounts to management committee for approval prior to the AGM. 12. Prepare a summary of the accounts for presentation to the Village for approval at the AGM. 13. Update the Charity Commission website with financial reporting data appropriate to the level of income and expense. The accounting package uses Quicken Money Manager 2004 as its basis. Reports from Quicken are used to produce 1. Monthly bank reconciliations 2. Income and expense analysis 3. Invoices for Village hall and /or equipment hire for those Organizations which require a formal invoice 4. Because of the way Quicken records information, it is not necessary to keep a separate Cash Book. Creating your Quicken files The package supplied to you includes a set of Master files. These files contain the basic data structure for your Quicken accounts. They contain the base categories in which you will create subcategories that will enable you to control the posting of income and expense to the correct subcategories for cost and income analysis. Some fixed sub-categories are already created within the base categories for fixed income and expense items. The first step in this process is to create a directory in My Documents called Quicken Data and copy a set of these files into it. Once in the directory they should be renamed by replacing the word MASTER with the Village hall name plus year which the accounts will relate to. So for example if we are starting the ISLEABBOTTS 2010 accounts the file list would be as follows: 1. MASTER.QDF becomes ISLEABBOTTS2010.QDF 2. MASTER.QEL becomes ISLEABBOTTS2010.QEL 3. MASTER.QPH becomes ISLEABBOTTS2010.QPH 4. MASTER.QSD becomes ISLEABBOTTS2010.QSD Throughout these instructions we will refer to ISLEABBOTTS2010.QDF when talking about your data file for simplicity. We also use My Documents/Quicken Data as our data directory you can of course use a data directory which suits your mode of operation. Page 1 of 34 Version 1.30

4 Installing Quicken Installing Quicken is very simple. Insert the Quicken CD in the drive, the installation should start automatically. If the installation fails to start then click START followed by RUN and enter d:\start.exe (replace d with appropriate letter for your CD drive), installation will start. Follow the on screen prompts and choose Typical for the installation type. Before you click Finish on the final screen un-tick Start Quicken 2004 when finished. Remove the Quicken CD and replace with the update CD provided in your package, this should start automatically (if not, follow the instructions in the earlier paragraph). The install program will ask if you wish to continue with the installation of Quicken 2004 click the Yes button, the next screen will ask if you wish to Repair or Remove Quicken choose Repair followed by Next and let the update run to the end and click Finish. Once complete remove the CD and store both CDs in a safe place. Setting Up Quicken The next stage is to open Quicken and start to use your newly created files. So on your PC open Quicken, you will be presented with the new Quicken screen. Select I am new to Quicken and click next. You will be presented with the screen called What do you want to call your data file?. Select I want to choose a different file name and location and click next. Page 2 of 34 Version 1.30

5 Quicken then drops you into the Windows file selection screen. Click the My Documents icon to open the My Documents folder, scroll down the folder list to Quicken Data and double click. You should see IsleAbbotts2010.QDF listed in the window ignore it for now and in the file name box enter Qdata and click OK. Select Pounds sterling and click OK You are then presented with the following screen. Page 3 of 34 Version 1.30

6 For now just click Exit Setup and when asked confirm exit. This will have taken you to standard Quicken home screen. Click on File in the top left of the tool bar and then Open. All things being equal you will see the screen below Click on IsleAbbotts2010.QDF and then OK, you will be presented with either the Quicken home window or the Cash Flow Centre window. For now select Cash Flow Centre followed by the MY Data tab and you will see the screen below Page 4 of 34 Version 1.30

7 Creating Quicken accounts You will need 1 Quicken account for each bank account The village hall has (Currently 1 current and 4 Savings accounts), plus you will need a further account called the cash account. We will discuss the cash account later on. At this time let s concentrate on creating Quicken accounts for the Bank Accounts the village hall holds. On the Cash Flow Centre window in Quicken click on Add cash flow account 1. You are offered the choice of which kind of account you wish to create. As this is your first account choose Current. 2. Click Next. In the financial institution box enter the name of your bank 3. Click Next. Click Manual as the method of entering data 4. Click Next. Enter a name for the account. We would suggest using your village name plus the word current. 5. Click Next to select the currency; use the default of UK Pound sterling. 6. Click Next. On this screen you will enter the Start date of the account in our example this will be 01/01/06, but for the village hall our financial year starts on 6 th of April. 7. On the next line you will enter the closing balance from your bank statements as at 5 th April. If there are any unreconciled transactions from the previous financial year these will need to be entered into Quicken, but more of that later 8. Click Done Well that's the first account created. You will need to repeat the process for each account the village hall has, including any savings accounts you may have. As mentioned earlier you will need to create a cash account, we will cover this in more detail in the next section at which time you can create the account. Page 5 of 34 Version 1.30

8 An important point to remember is that there are various ways to operate in Quicken. This process sets out to define what we believe is the most basic method of operation. If you are new to Quicken we strongly recommend that you follow this as written. Using Quicken Before we get into using Quicken a few words about the structure of the data in the master files. Quicken uses a category and sub-category to identify what event an item of income or expense relates to. In order to establish a common basic structure the MASTER package supplied includes all the key major categories for income and expense. If you click on Tools on the top task bar and then Category List the following window will be displayed The figure above shows the categories & subcategories which were used to classify 2009/10 income and expenditure. When using Quicken you will create the primary sub-categories that will define your events. There are a few key rules that must be followed 1. The primary sub-category for an event must be the same for both income and expense I recommend you create the income and expense subcategory at the same time to ensure the name is the same. 2. You can create further sub categories under a primary sub category and these do not have to be the same in income and expense. So for example tickets for the ball would appear as Category - Events Income, Primary Subcategory 2009 Ball, and a further Subcategory Tickets. The figure above shows this usage clearly; note the indenting of each successive subcategory. 3. Every village hall event, no matter how small, must have its own Primary Subcategory. Page 6 of 34 Version 1.30

9 4. For ease of viewing your reporting data you may wish to preface event names with a number to ensure events appear in chronological order, I started using this technique in later years and found it a great help (Quicken reports sort events by name). 5. If you run the same event in more than one year then it's advisable to include the year in the event name. For example if you have a summer ball nearly every year then it should be named 2009 Ball, 2010 Ball etc. Remember the better your control of sub-categories the easier the management of your end of year accounts. Creating Subcategories Subcategories can be created on the fly; however we don t recommend you do this until you are more conversant with Quicken. For now you should use the following method. 1. Click on Tools Category List, the above window will be displayed. 2. Click on New, the window below will be displayed. 3. Enter name of the event in this case 2009 Ball. 4. Click on Subcategory of the appropriate income parent sub category. 5. Click OK to complete the process. 6. Repeat the process to create the expense subcategory. Remember for every event primary income subcategory there must be a matching expense subcategory and vice versa. Page 7 of 34 Version 1.30

10 Cash account Before we discuss the cash account lets just look at the various ways in which you, as village hall treasurer, handle banking activity for the village hall. In its simplest form every time you receive a payment you record it in the cash book and then pay it into the bank and every time you have to pay a bill you write a single cheque for the whole item and record it in your cash book. Clearly this never happens, multiple payments are received and consolidated into one paying in slip and some items require more than one cheque to cover the costs (deposits, interim, and final payments). So what do we need a cash account for? Well a better name would be a paying in account, since it allows you to record all the detail of moneys you receive and categorize it correctly before transferring the whole amount (which equals the paying in slip) to the current account. Cheques which you write are entered directly in the current account as each cheque is a line on the bank statement. By doing this your current account will reflect the items which appear on your bank statement and as such will be much easier to reconcile. The other advantage is that all of the detail which supports a paying in slip is in one place, and since you can search Quicken using any of its data fields it makes it much simpler to track down payments and receipts. So for simplicity I would recommend that you have a cash account and that by following the few simple rules below banking will become relatively painless. 1. Enter all the paying in detail in the cash account. One payee per transaction, villagers can pay for more than one event with a single cheque. You can use the split function to separate it into the different events. 2. Consolidate blocks of entries on one paying in slip. This way the cash account will grow as you receive member s payments and then return to zero as you pay the block of entries into the bank. 3. Transfer the value of the paying in slip from the cash account to the current account. DO NOT TRANSFER MULTIPLE PAYING IN SLIPS AS A SINGLE ENTRY, AS THIS WILL CAUSE CONFUSION WHEN RECONCILING THE BANK STATEMENTS. Remember the block principle keeps the cash account simple. Taking a block of received payments, entering them in the cash account, creating a paying in slip and transferring the total to current account ensures that after a paying in event the cash book is at zero plus any cash you may be holding in the petty cash box. Should a query arise with the paying in slip at a later date, you will know that all the entries back to the previous transfer are part of the in question paying in slip. Creating a cash account is just the same as any other account. Use the add account button on the Cash Flow Centre - My Data window (make sure you use the add account in the Spending and Savings section). Select Cash as the account type and proceed as before. Quicken automatically asks only questions needed to open your cash account. Backing up your data Clearly back up is a key part of your accounting process. Quicken will periodically ask if you wish to back up your data. We recommend that you take a back up every time you close Quicken. Its very simple press Ctrl-B together and the back up window will be displayed. The file name in the top box should relate to the Quicken file you are currently using. The lower box allows you to choose the backup location for your Quicken data. Always make sure the Disk option is selected. Initially we would recommend you write the data to Quicken Data\Backup folder and then copy of the 5 backed up files, plus any other Village hall data you wish to back up to a USB flash drive. I always backup to disk as above. Then once a week we add a copy of Quicken to my USB flash drive, creating a new folder each week for the back up. This way if your hard disk is lost or damaged you will only have a maximum of 1 week of data to re-key. Page 8 of 34 Version 1.30

11 Quicken Help Before we get into the detail of using Quicken, we would like to commend Quicken help to you. It is an invaluable source of information not only about how to do various tasks. But also it gives information about what a particular function does in accounting terms. If you click on How do I? or Help, it will provide contextual help together with the normal help index/search facility. Inputting Data into Quicken Each account records your data in its own register. Each register entry contains the following fields 1. Date 2. Ref - Type of transaction 3. Payee 4. Category - This field defines what the income or expense relates to. This will be divided into sub categories and each level of sub category is separated by a colon in the category field. 5. Memo - This free format field can be used for any purpose you wish, however as a minimum you should enter the year that the register entry relates to if different from the current year. For example the current year in Quicken is 2010 however you are paying for an item from a 2009 event. You should enter 2009 in the memo field to allow you to separate out other year costs. 6. Spend 7. Receive 8. Balance 9. Clr - indicates if the item is uncleared (blank) or cleared/reconciled (R). Predictive text Date A few words about how to enter the date. The date field will normally present you with the first 2 characters (the day) highlighted. In this mode you can change the date by entering enter and the date will be entered as 01/01/2009. If however the day field is not highlighted then you will need to enter the full date 01/01/09 enter. Once you have entered the date Quicken will use this date for subsequent transactions until you change it or exit Quicken. If you only need to change the day and it is highlighted then just enter the new day number and hit enter Payee As you enter the data into Quicken it will offer you previously entered transactions to reduce the amount of typing you need to do. (See illustration overleaf) If the offered name is incorrect just keep typing, if the name is in there, it will find it. If it is not there then carry on entering the data as normal. If the name offered is correct you can use it two ways 1. You wish to use the whole transaction and edit the data to reflect the new details. Simply hit enter or tab and Quicken will write a complete duplicate entry into the register. You can then edit any of the fields to reflect your new data. 2. You wish to only use the Payee name and will enter the rest of the data yourself. Once the payee name is highlighted, move the mouse pointer to amount field and left click. The name will be entered, the amount field will be highlighted and you can enter the transaction amount and continue as normal. Page 9 of 34 Version 1.30

12 One other point you should remember about entering the Payee data. Because Quicken uses this predictive text process, when you enter a completely new Payee you will need to hit the enter key twice Once will register the name and give you the option to change it, the second time will move you to the amount field. When I first started using Quicken I was forever over typing the Payee with amount. A simple alternative is to use the tab key once you have entered the name. This will move you directly to the amount field. Category The category field offers a similar sort of predictive text input as the illustration below shows. As you enter category data the category window appears. You can use down or up arrows to locate the correct category. Once highlighted, hit enter to write the category into your transaction. We Page 10 of 34 Version 1.30

13 strongly recommend this method, rather that trying to type the entry from memory. It s quicker, and provided you follow the procedures described later for new year processing you will not have a very large number of categories to page through. Splitting Data Transaction data is at a single payee level, however, multiple events can be paid for with one entry. As is the case with the Dave Bradshaw entry, here the category field simply states --Split-- this is to indicate that the money received is spread over more than one sub-category. To enter split data enter the total amount in the appropriate amount column and then click on Split and the following window is displayed. In this example the data entered is already split into sub-amounts. Normally if the split has not been entered the total amount will appear in the first line. Simply enter the first sub-category in the category field and then over type the total amount with the split for that category. Click Next and the Quicken will move to the next line which will contain the balance. Repeat the process on following lines until all of the sub categories are entered. Once completed all the sub categories should add up to your total and no remainder should be present. Click on OK to enter the Split. Transferring between accounts Transferring money between the cash account and current account is very simple. On the cash account register screen click Transfer and the Transfer Window will be displayed. In the Transfer Money From box make sure the Cash Account is displayed and in the To Account select the account to which the money will be transferred. In the Description box enter a meaningful identifier to link the entry to your paying in slip. If your bank numbers their paying in slips, then use that number, if not then use anything which will help you identify the paying slip. The Transfer Window is used whenever money is to moved from one account to another, do not use Debits and Credits to move money between accounts as this will create incorrect receipts and Payments totals. Page 11 of 34 Version 1.30

14 Current account register Below is a copy of the Current account register for the same period, notice the transfer entry and how it relates to the cash account entry. In both cases they show the description entered in the Payee field and the category field identifies where the transfer is to/from. Notice also the cheque payment - make sure you include cheque numbers. As with the cash account, split entries are permitted. One small point, look at the entry for the Langmere Hotel, it looks like the category is Members Expense:Social:Deposit this is not the case, the full entry actually reads Members Expense:Social:2006 Dinner Dance the word Deposit is written in the Memo field. This is partly caused by sizing the Quicken window to place it in this manual. If you find that you have this problem and find it disconcerting when you are using Quicken, the following will minimise the effect. 1. Make sure your window is maximised when using Quicken. 2. Drag the edge of the register within the window as far to the left as possible. You should now be in a position to start entering data into Quicken. If you follow the instructions in the previous pages and the data entry process it should be relatively simple. The list overleaf is a simple summary of dos and don ts. 1. Payments by cash can only be made for small amounts (< 75) against bona fide receipts and should be entered in the cash account. 2. All other payments should be via cheque and detailed in the current account. 3. All money in should be recorded in the cash account at an individual payee level where possible. 4. If necessary use the split function to distribute balances across multiple events. Page 12 of 34 Version 1.30

15 Creating invoices Most of the income the village hall receives is from ticket sales etc which do not require any form of invoice to be prepared. However there are occasions when for example the hall is hired to charity where an invoice is needed. To create an invoice, click on Customer invoices in the Business Centre. This will show the invoices introduction panel the first time you use invoicing. Once you have finished with the introduction click done and the customer invoices register is displayed. Click Create new Invoice and the following form is displayed. The information entered on this example is the minimum required to produce a useable invoice. Appendix A shows the resulting invoice which this invoice input produces. Quicken automatically sets the due date to 30 days after the current date, if you require payment sooner then change the due date. When you receive payment for an invoice go to the entry in the invoice register and click form this will display the form above. Click Receive Pmt. and the following window will be displayed. Page 13 of 34 Version 1.30

16 Firstly check the Deposit to box and change to the correct account (cash account if it is to consolidated on a paying in slip, current account if it is to paid in on its own).if the payment received equals the amount due then just hit enter and Quicken does the rest. If you need to alter the payment then do so in the Amount box and then hit enter. Quicken creates a payment received entry in the invoice register and transfers the received funds to the account identified. Quicken Printing Before we start on monthly reconciliations we need to set up the printer definitions. Quicken has the capability to print in a number of different ways, it has the facility to set up alternate printers to do different tasks. So before you try to print the reconciliation report you need to just check that you have the correct printer defined. To select your printer click on File then Printer Setup and For Reports/Graphs the displayed window will allow you to select a printer from your printer list and change the fonts and margins etc if needed. This setup must be completed before you try to print any reports/graphs. Similarly you will need to repeat the process for setting up invoice printing but in this case use File then Printer Setup and For Printing Invoices, the displayed window will allow you to select a printer from your printer list and change the fonts and margins etc if needed. Bank Statement Reconciliations As a treasurer, a key part of your responsibilities will be statement reconciliations. They have a multiple purpose. 1. To ensure that your accounts are in sync with your bank s view of your financial status. 2. To ensure you have a current view of actual account balances as well as your cleared account balances. 3. To demonstrate to the Committee that you are in control of the hall s finances. Reconciliation within Quicken is a relatively simple task provided you have followed the ground rules detailed earlier. So let s get started, firstly make sure that your Quicken is up to date. All cash account and current account entries are completed and that all paying in transfers from cash to current account have been completed. Click on reconcile on the current account register and the following screen will be displayed. Page 14 of 34 Version 1.30

17 A few words of explanation of the various boxes Opening Balance this is the last reconciled balance for the current account it should also be equal to the opening balance on the bank statement we are about to reconcile. If it s not equal don t start the reconciliation because it will not balance at the end. Ending Balance you should enter the closing balance from the bank statement you are about to reconcile. New Statement Ending Date this date should equal the last date on the statement you are about to reconcile. The lower part of the window (area 2) allows you to enter bank charges and interest whilst reconciling you account. We find it much simpler to ignore this section and make the entries directly into the register before starting the reconciliation. So assuming you have completed the last 2 boxes correctly when you click OK the following screen is displayed:- Click in Clr box for each entry which matches an entry on the bank statement. Once you have clicked on all the bank statement entries, the Difference will be zero if the reconciliation is correct. If there is a Difference then check back through each of the entries looking for an incorrect value, it may be that there was an error in a cash account entry which resulted in the bank changing the amount paid in. If this is the case then cancel the reconciliation, correct the offending entry in the cash account, correct the transfer value and then redo the reconciliation. If the error is simply the miss posting of a cheque in the current account then double click on the amount and this will take you back to the register entry to allow you to correct it without cancelling the reconciliation. Page 15 of 34 Version 1.30

18 Once the Difference is zero then click Finished and the following window is presented Click on the Yes button to produce your reconciliation report, a copy of which appears as an appendix to this guide. To produce the report, you need to set certain parameters in the window below, which is displayed when you click Yes Firstly click All Transactions this will produce a longer report with all transaction data which will be more useful in the long term. Next give your report a title, we suggest it starts with Month Year. Make sure you have a printer available to print the report. Page 16 of 34 Version 1.30

19 Quicken Reports Quicken has a very comprehensive report generating facility, which can produce customised reports to cover most eventualities. It is not the intention of this section to cover all the possible options, but to highlight the key report that you will need as a treasurer. Before we look at individual reports let s look at the report screen. Let s start with the top row of commands and just give a brief description of its function Delete Copy Sort Preferences This allows you to delete the report currently highlighted in the report history This allows you to copy the current report to a spreadsheet, the function works well with Excel. This function allows you to change the order in which data is displayed in the report Allow you to set specific base preferences like date range. Let s look at the history side of the screen. Firstly the displayed history relates only to the current report screen. Each time you change the report a new title is added to the history. This is very useful if you try a change and it does not work. Simply hit the Delete button and the report view will be deleted and you are returned to the previous view. The 3 buttons are fairly self explanatory. Back and Forward will take you up and down the report view list. (Clicking on the report title will take you there as well). Print will display the window shown overleaf. Page 17 of 34 Version 1.30

20 These settings are straightforward with no real complications. However, remember you must set the printer you wish to use in File Printer Setup For Reports/Graphs as discussed on Page 15. You can do this while you have the report displayed but you cannot change it whilst the above window is displayed, so simply hit the Cancel button, set up the printer try again. Report Customisation Customisation can be split into 2 areas: Simple customisation This is setting the date using the date options using the down arrow to select a predefined date range, or alternatively click on Custom date to specify your own date range. The other simple customisation is Subtotal by, the name of this box changes depending on which report is being produced. Most reports will subtotal in columns with a grand total on the right. Other reports such as the register report will subtotal in a single column with a grand total at the bottom. Detailed Customisation Allows you to create a detailed report, formatted to include just the data you need to produce a set of year end accounts. We will take you through the report process to generate the data for input into the year end accounts spreadsheet. Rather than describe in detail all the customization options which are available we have included views of all of the customise options as they will appear on the screen when you click the Customise tab. The report we will produce is Reports Cash Flow Income/Expense so click here and let s make a start on our first report. For this exercise select all dates and none in the subtotal box. Assuming you have data in Quicken, a single column report will be displayed. Click on Customise and the window overleaf will be displayed. Page 18 of 34 Version 1.30

21 From this screen you set up all of the basic settings of timescale and format. For year end accounts set the date range to custom date and dates to 06/04/20xx to 05/04/20xx+1 of accounting year. Set Row to Category. Set Column to Don t Subtotal. Set Organisation to Income & Expense. Check Show has Hundredths ticked. Next click on the Accounts tab to display the window below In this window you should select all bank accounts together with your cash account and customer invoices (not selected in the example above.. Next click the Category tab to display the Window overleaf. Page 19 of 34 Version 1.30

22 For this report make sure that Mark all is clicked as you want to include everything you have entered in the years accounts. Clearly if you are looking to separate out other data this window will allow you to be more selective in what you include in your report. Next click on the Category Groups tab to display the window below Page 20 of 34 Version 1.30

23 For this report make sure that Mark all is clicked as we want to include everything we have entered in the years accounts. Next click the Advanced tab to display the Window below In this window we will check a number of things. Set Amounts to All, and ensure all 3 items in the Status box are ticked. Set Transaction types to All transactions. Set Transfers to include all. This will cause your report to include all transfers from the cash account to your current account. These are shown at the end of the report as positive and negative amounts so cancelling each other out. Set Subcategories to show all. This will ensure all the detail relating to your accounts are included. Click OK and your report will be displayed. Remember this is a report of your income and expenditure during the accounting year. It does not consider your opening balance at the beginning of the year or your closing balance at the end of the year, just the I&E during the year. We would strongly recommend you look at some of the other available reports and how you can customise them. As mentioned earlier there are many ways to do the same thing in Quicken. Our intention here is to provide a basic working structure which will enable you to produce a good set of year end accounts. For committee meetings I would recommend the following reports are produced for review at the meeting. 1. Account Balances report, this contains details of current state of finances and should include all accounts together with Invoice and Liability accounts. Click Net worth & Balances-->Account Balances. 2. Banking Summary report, customised as follows Set the custom date to start from 06/04 to current date On the advanced tab make sure that for subcategories SHOW ALL is displayed. 3. Detailed Income and Expense reports for any recent events. Page 21 of 34 Version 1.30

24 4. Any additional reports which you wish to included to highlight information the committee should have. Producing annual accounts (Year end reporting) will be covered in the next section. Page 22 of 34 Version 1.30

25 Producing Annual Accounts Once you have finalized your year end accounting you will need to complete the following:- 1. Produce a set of accounts for the independent reviewer to examine and give an opinion on. 2. Produce an accounts package for Review and Approval by the Committee. 3. Produce a package of the approved accounts for presentation at the AGM that will enable the AGM attendees to understand and approve. The above reports produce different levels of detailed accounts with item 1 being the most detailed. The packages for 2 & 3 should end up as the same package since the package that the committee approves will become the formal accounts presented to the AGM. When presenting the accounts in items 2 & 3 always have the detail from the item 1 package available to answer any potential questions that may arise. The following step by step process you should use to ensure that the accounts are in order and ready for audit:- 1. Run Net Worth &Balances report 2. Run the Banking Summary Report 3. Check to make sure there are no uncategorised or unrecognised categories of income or expense. If there are they must be corrected before proceeding. 4. Get bank ending balance data from previous year annual accounts. This should also be equal to the Quicken register balance as at 6 th April (the start of the accounting year). 5. Check that the year end reconciliation was completed without error 6. Get closing balance for the year from Quicken Register. We are now in a position to prepare the first view of the accounts this view will include all of the summary data which will appear in the final accounts this will include:- 1. Balance sheet There is spreadsheet included in the package which, when completed, will produce a balance sheet for the accounts. (See accounts.xls) 2. Income & Expenditure Statement 3. Banking Summary This is a standard Quicken report, set custom date to equal accounting year (for example 06/04/2009 to 05/04/2010 (dont forget to include the invoice account this will ensure the transfers balance). 4. Net Balances 06/04/XX (for example 06/04/2009) This is account balances at the start of the year. 5. Net Balances 05/04/XX+1 (for example 05/04/2010) This is account balances at the end of the year. 6. Transaction Report for the whole financial year. This should include all accounts and all categories, This basically a journal of all of the transaction which have occurred in all of the accounts during the previous financial year this is principally for the use of the person reviewing the detail of the acounts on behalf of the village hall management committee Page 23 of 34 Version 1.30

26 Annual Accounts Spreadsheet There is a spreadsheet in the previous years archive called 20xxaccounts.xls this spreadsheet provides a standard format to layout the year end accounts. The spreadsheet consists of 4 sheets 1. Balances Sheet details net worth at the end of the financial and provides a check link back to the previous years accounts 2. Receipts & Payments Provides a summarised breakdown of the years accounts and a comparison with the previous years totals 3. Year End Banking - provides detail of receipts and payments at a detailed sub category level. 4. Events provides detail by event showing income, expenditure and profit or loss The first step is to copy this spreadsheet and rename (for year ending 5/04/2010 it will become 2009accounts.xls). We can now start to prepare the spreadsheet, which will become our year end accounts. 1. Move all the dates on by 1 year. 2. On the Balances sheet copy the Ending balances for previous year to the starting balances for the Current year and remove the old ending balances. Enter the new ending balances from Do not delete the income and expenditure values as these are auto fed from the Receipts & Payments sheet. 3. On the Receipts & Payments Sheet key in the old totals in Column E the Column G. Remove all previous year detail from the amounts fields, taking care not to delete total fields that are normally bold. Do not clear column G above. Remove all previous year specific descriptions (for example event names) Enter all current year specific descriptions both for events and any other unique receipts and payments which you wish to highlight in the accounts. 4. Page 24 of 34 Version 1.30

27 Year End Processing Year end processing should take place as early in the new financial year as possible, and must be completed before you enter any of the new year data. It is best broken down into a series of events. Some of which are Quicken activities, all of which will help you to produce an accurate set of accounts for the year you are closing and a clean opening balance for the following year s accounts. The following is a very basic activity list for year end processing. The order is not exactly critical but most of the activities are affected or have an effect on other activities. This will become clearer as we move through the list. 1. Ensure all cash account transactions have been transferred to the current account and paid into the bank. The cash account balance at year end should be equal to the contents of the petty cash box (as it always should). 2. Make sure, where possible, all outstanding invoices are paid before year end. 3. Print a copy of invoice register. if you have any invoices for which you have yet to received payment. The unpaid invoices will need to be enter into the new years invoice file. 4. Make sure that all transactions that relate to the following year have the year recorded in the memo field. 5. Reconcile Quicken up to the 5 th April. Do not reconcile after the 5th if the Bank statement covers 6 th April onwards. Simply draw a line under the last entry for prior to 1 st entry after 5 th. The rest of April data will be reconciled in the following year s Quicken file. 6. Once you have reconciled to the 5 th April you are now in a position to create your new set of Quicken files. There are other activities related to producing your year end accounts and I will cover these in the appropriate section later on. At this stage our task is to close out the previous year and start the new year. Creating the New Year Quicken file Quicken has built in software year end processing routines. However we will not be using these as they do not address 2 items which while not show stoppers do tend to make Quicken more difficult for us to use. These are:- 1. Old event sub categories are not removed; this means the category list becomes longer and more difficult to use, with event names becoming confusing if similar events are run over a number of years. 2. Less of a problem but also likely to slow you down in Quicken is the Payee history continues to grow. This means although you are more likely to find a Payee in the history, it will take longer to do and be more prone to error. The approach we will take is to build a fresh set of Quicken files each year. We will follow the procedure we used to get started in Quicken. Rather than spell it out in detail we will summarize the steps here and direct you to the appropriate page with detail. 1. From the previous years Quicken take the details of any unreconciled transactions in your Quicken file, as these will need to be re-entered in your new Quicken file 2. Make a note of the closing current account register balance 3. Copy the master files and rename. Page 1 4. In Quicken click on File - Open and open the newly renamed files Page 4 5. Once open you will be presented with one of the Quicken home screens Page 4 Page 25 of 34 Version 1.30

28 6. Click Cash Flow Centre to add all your bank accounts Page 4 A word about Opening Balances or as Quicken says Ending Balances. The ending balance you enter for each account is the closing balance on the bank statement as 5 th April. Do not use the Quicken register closing balance, as this will give you a reconciliation problem. We will address unreconciled transactions later in this exercise. 7. Add your cash account Page 8 8. Add the subcategories for the unreconciled transactions to be re-entered from the previous years accounts Page 7 9. Enter all unreconciled transactions from the previous year in each of your bank accounts. Enter exactly as they appeared in the previous year files. 10. Enter all invoices that you have not yet received payment for in the invoice file. Enter exactly as they appeared in the previous year files 11. Once this is completed check that the Opening Balance now equals the register closing balance for the previous year ( item 9 will alter the value of the opening balance because the transaction dates are earlier than the opening balance date). If they are not the same then check The closing balance in item 2 was noted correctly Correct opening balance entered in Item 6 The transaction(s) entered in item 9 are correct If all of the above are correct then there is a problem with the 5 th April reconciliation which must be corrected before proceeding. 12. Enter the income and expense sub categories for all known events for the now current year Page 7 You are now in a position to start entering your new years transactions Page 26 of 34 Version 1.30

29 Appendix A: - Sample Invoice Page 27 of 34 Version 1.30

30 Appendix B:- Reconciliation Report Page 28 of 34 Version 1.30

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