Starting mid-year

Question asked by Adrian Bhagat 8 years ago

I am thinking about switching to ClearBooks (from Wave) as I am about to register my business for VAT and I need an accounting package that will generate VAT reports for me. I have a ton of questions but the first one is this: My accounting year runs to the end of September. Does it matter than I am switching to ClearBooks in the middle of a year? I don't particularly want to have to add months' worth of past transactions into ClearBooks, though I can see that there may be advantages in doing so. I have an accountant to do my tax returns but will they faint if they see half the year in one system and half in another? I'm concerned that any end-of-year reports generated by ClearBooks will be invalid due to the missing data. Many thanks for your advice.

11 Replies

Hi Adrian - CB is flexible enough to bring in the numbers in any way that suits you and/or your accountant, so if moving over part way through the year I'd suggest you have two choices:

  1. export X month's transactions from Wave in CSV (I think you do this from the backup feature) then edit them so that they can be imported into CB. Typically CB imports sales invoices, supplier bills and bank transactions with the latter capable of being refined to just show receipts or payments to set against invoices or bills. In other words you import X month's sales invoices then import just bank receipts that pay off invoices and, by giving each a sales invoice reference, it automatically sets the money against the invoices. This saves having to manually match each receipt from the bank import.

As you indicate, in this way, when your accountant comes to look at the year's figures s/he only has one place to go to break down the numbers.

  1. Enter just X month's balances into CB using the "getting started" feature (or export a trial balance (TB) at the switchover date, from Wave (again in the backup I think) and import that into CB, as a Journal entry). In other words, whether it be sales, motor expenses or the bank balance, just the totals at the switchover date will be shown in CB.

So when your accountant comes to look at the year's figures, they will still have a full year's worth but if they had any query over what happened in the first X months, they'd still have to interrogate Wave (or the backup CSVs).

I didn't mention the 3rd choice of having X months in one system and Y months in the other as your accountant would be forced to interrogate both to extract the TBs and join them together, something bound to add to cost and frustration.

An unknown at this stage is the opening TB on Wave at 1 October. Hopefully this is installed in Wave so there's no need to worry about it but I know some accountants just keep this to themselves then add just the transaction totals from a client's books for the year. This should be a thing of the past with Cloud accounting as the accountant should be given full access to make sure the books reflect the accounts submitted on the tax return each year.

You should ask your accountant what they prefer, especially as they will know about your books and so be better able to advise. If it were me though I'd far prefer one place to go to look at a year's figures (eg option 1) and this would certainly be the case if HMRC decide that want to have a look at the accounts for that year.

There are a couple of videos that might help:

Basic setup of CB (before numbers): Opening balances:

Come back if any other queries but, once you sign up to CB, you have free support either via "tickets" or phone.

Whoops both options are numbered 1. !

Hi Paul, Thank you very much for your lengthy answer; it's very helpful. I think I will go with option 2 so that I can get started quickly with CB.

OK, I am starting CB from today and I am trying to set it up. I'm slightly bewildered but here goes.

I have set the CB start date to 1/10/16 so the reporting period runs to 30/09/17.

Firstly, I have set up a Director's Loan Account and a Cash-on-hand account. How do I set the opening balances of these? The help article is missing ( I want to set the opening balances as they are today, rather than on 1/10/16

I have added the details of a few of my suppliers. How do I set the opening balance for what I owe them? Should I add a bill?

Many thanks for your help.

Sorry, I've just realised I didn't watch the video you posted. I'll try that first.

Hi Adrian - as you'll probably gather from the videos, if your start date is 1 October, you'll not be able to use the "getting started" function under "Dashboard" to put in opening balances and unpaid bills & invoices as they will all be treated as relating to 1 October.

So yes, enter today's unpaid invoices & bills as normal then add all the other balances via journal entry (Tools > Journals). This can get fiddly as, by entering unpaid bills & invoices, you'll be generating sales and expenses so, if you want to get the sales and expense accounts up to their 4 month totals, by journal entry you will have to deduct sales & expense bills already entered.

The getting started function uses the retained earnings account as the dustbin, ie as you add balances into the other accounts, the other side of the entry (journal) goes to retained earnings, you can do the same and even put all the sales and bills to this account rather than sales and expenses. If you use this account make sure that you tick the sales & purchases check boxes next to it on the Account codes list (Settings > Accounting > Account codes) this makes it available in bills & invoices.

Two extra things.

If any unpaid invoices & bills today were dated pre 1 October, you'll need to either date them 30 September or create an accounting date for the year to 30.09.16.

If you are on VAT invoice accounting the system needs to know that the invoices & bills you are entering as unpaid today, have been recorded on previous VAT returns and so, as soon as they are recorded, create a VAT return or series of returns, up to 31 January to take care of them all. You just need to create and confirm them, here's no submission necessary. This doesn't apply if you are on cash accounting.


Thanks Paul. I think I've done something similar (!) to what you suggested and I'm getting used to the software now.

Currently my business isn't registered for VAT. I've added a bill for items I have purchased and there are some items that are VATable. However, the only option under the VAT column in 'No VAT'. How do I tell CB that I have paid VAT on this bill?

Thank you.

Hi Adrian as you are not VAT registered there's no point in recording the VAT, ie if the cost to you is £120 that's the cost, the fact there's £20 VAT in it is irrelevant.

There is however a Toggle feature (Settings > Configure system > Toggles) on the Invoices & expenses page to enable VAT recording, even if you are not registered. I've never used it but, if you are interested in recording VAT it might be worth a go.

If it doesn't work then check the Tax page in Settings > Organisation which has a manage VAT schemes page where you might have to record a "Not VAT registered" status.

As I say none of my clients have ever wanted to record VAT so I'm not sure but you can always ask support (via the ? icon)

Thanks for your reply. I'm going to be registering for VAT shortly and I understood that I could reclaim VAT paid for items that I had purchased prior to registration. I thought it might be handy to start recording VAT paid so I know how much to claim. However, I realise I probably should have been doing this since the start and I am going to have to do a stockcheck and do a search through 18 months worth of receipts to find all the VAT I've paid in that time.

Oh I see - I'm not sure how CB would be able to show you the VAT recorded with the Toggle switched on but, as you say, you can go back a lot longer so most people build a spreadsheet and enter one bill or journal in the books dated 1st day of VAT registration to get the claim onto the VAT return.

Subject to some special rules, you can go back 4 years for stock and assets you still own on day 1 and 6 months for services. You should always double check the rules here so have a chat with your accountant &/or read section 11 of VAT notice 700.

That's great, thank you very much for your help. I can foresee a lot of long evenings with piles of receipts ahead of me.

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