This is Accountant from uae. I am going to join a new within few days... this company is a construction company. The problem is for me that they don't have any record properly there. They have just maintained some of the expenses for the year feb 2008 in excel. Now I want to start in focus or tally all details.. one is that I dont know there receipts during the period. they only few records about that. they dont have any record about tools as well and there depreciation. I don't know how start the work. i am bit confused about that how to start and from where should I start. what are the things I need to keep in mind. I hope that you will help me in this regard. So suggest me how to start the work.
Not only you many accountants face this problem when they join any new concern they find incomplete record. Preparing accounts without some or all prime accounting information is very difficult. When there is no old record of assets, liabilities, debtors, creditors or any bills of incomes or expenses, writing up his client’s books is not easy. In this situation following steps will be helpful to you to prepare accounts from incomplete records .
Making an Opening Balance Sheet When it is not available
You must start your working by making an opening balance sheet manually before recording it in tally. If opening balance sheet is not available for your construction company, then try to trace the balance of different assets and liabilities from your Company’s owner, directors, CEO and manager after meeting with them and you can check all assets and liabilities by physically by making a rough list .
- If your construction company has building or plant then how many and what is its cost.
- If your construction company has taken loan, then from where and what is its opening balance.
- If this create your construction company in Tally.ERP 9 or Tally 9 which you are using and
Prepare summary of Cash Book
You have said me that your client has given you the information of his expenses in excel sheet. Ask more information about bank transactions or try to get bank receipts with this you can trace old receipt transactions of your construction company which will be record in tally receipt voucher.
You know that in the receipt side, we write cash sale and other incomes of business which we receive either in cash or through bank. Even company can introduce new and fresh capital which you have to write in the receipt side. Try to recognize your cash book with bank pass book and it will give you many information regarding which item is not recorded in Company’s book.
Make the list of Debtors and Creditors
It is very necessary to know about amount due to creditor and amount due from debtors. You have to make new list of debtors and creditors by getting knowledge from your construction company’s owner. By analysis current and previous year Debtors and creditors list , you can know many new things
Credit sale = If you have opening balance of debtor and you have known who are the debtor at this time and from bank statement what amount of cash received from debtor . Then you can find credit sale of this year
Credit Sale = Closing debtors + amount received – opening debtors
X = 10000 +5000 – 8000
X = 7000
Discount Allowed = Opening debtors + credit sale – amount received – closing debtors
Bad Debt = Opening debtors + credit sale – amount received – discount allowed – closing debtors
Credit purchase = Closing balance of creditors + amount paid – opening balance of creditors
Discount received = Opening creditors + credit purchase – amount paid – closing balance of creditors
You also analysis advance payments to creditors and also advance amount received from debtors.
Calculation the value of Stock and Work in progress
You should check all stock and work in progress. These is our current asset and after physically check the material make the list in tally by going
Gateway of tally >> Inventory info >> stock items >> one by one write all items of your construction company. You can also write there measurement way
Gateway of tally >> inventory info >> units of measurement >> create
Check out also the problem relating to the solution of valuation of stock
You should help the specialize person who can calculate the value of present stock.
Calculation of special items
a) Calculation of depreciation and its record in books
b) Calculation of personal benefits from business
If you succeed to make final accounts after analysis above. After this never to forget to record your current transactions. Many current transactions will be linked with your old transaction and you will know many new things which you have omitted. After some time, your company’s financial and revenue position will show correct position. If you have doubt any specific item, then you can contact me again.