issuing new shares does not add to Share capital

Question asked by David Foster 5 years ago

We've used ClearBooks for P&L transactions for a while, but now I want to get the balances straight so the Balance Sheet is correct going forwards. I've added shareholders, issued new shares following the on-line guides, but it's not showing as Share Capital (9001001) in the Balance Sheet. The only way I've been able to get something there is to go back and create a starting balance in "getting started". That's ok, but it feels wrong! What am I missing? Why doesn't issuing new shares add to the Share Capital? How would I issue new shares in the future (unlikely, but I can't go back and change the starting balance a second time).

8 Replies

Hi David

The shareholding part of the system is purely for dividend purposes to enable the process to work correctly [to spit out the correct docs etc]. It does not make the necessary balance sheet entries. As an accountant i'm extremely glad of that, things could get very messy otherwise.

I would suggest speaking to your accountant to get the trial balance entered correctly as per your last set of accounts.

Thanks Kevin - that's helpful. I have already spoken to my accountant - in fact he suggested we do this in the first place. However, as a 'Sage' man he can't really help much on how to do it in ClearBooks. My original plan has been to use ClearBooks purely to record all the in/out transactions (so P+L) for the management accounts, and let him sort out the rest including balance sheet at year end. That was fine for a couple of years, but now he's pointed out it would actually be easier for him too if ClearBooks was simply right. And I'm not finding it that easy to straighten the balances out!

So I think I'm going to set the original balance back to zero, then do a journal on 'Day 0' to add cash in the bank account and add Share capital. Does that sound right?

I agree, I can imagine the way it's being done at the mo causes more hassle than it's worth.

When was your last year-end? You need to ask your accountant for the trial balance at that date then journal it in [some my need to be done slightly differently than via journal though].

More than happy to talk you through it if needed as i'm sure will the CB support staff.

Hi David - hope it's OK to jump in here.

It really does save a lot of time and potential grief if you encourage your accountant to get involved in the books. The biggest benefit by far of cloud accounting is the ability to collaborate in the bookkeeping to keep them accurate and up to date enabling you and your accountant to see how the business is doing month by month and not only at the year end (or rather 6 months after when the accounts are prepared).

This also means that, when your accountant extracts the numbers from the books at the year end, they are pretty much perfect, making the year end stuff so much easier and quicker. From a tax point of view as well, if HMRC ever raised a query on the figures in the accounts you can just provide them with the details from the books but, more importantly, in a couple of year's most small businesses will be submitting accounting information to HMRC on a quarterly basis and so it's essential that, by then, the books are "accurate and up to date"

So, as Kevin suggests, your accountant will have the trial balance from your last year end you can invite him to login to look at the equivalent trial balance in Reports and to see what balances need updating and you and/or support can help with how to do this, providing him with more familiarity with the bookkeeping and, hopefully for Clearbooks, making him realise that all his clients should be on here!

You both paint a picture of a wonderful world. My accountant has already sent me the balance adjustments he'd like. I'm just starting to work my way through them one by one, learning as a I go, and thought I'd start with an easy one. Share capital.

Not managed to get through to ClearBooks Support on the phone the last few times I've tried, which is why I tried posting instead. Really grateful for your help both.

I'm really with Paul on this one, your accountant should [politely] be making the effort to jump in and learn the system so as to best guide you. The whole point of cloud accounting is better collaboration.

If your accountant has any queries or uncertainties about CB or cloud accounting in general I'm only too happy to speak to him, just get him to drop me an email

That's very generous of you.

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