FAQ Number : S3b                                     Latest Update: 2/2/11

1.     Gather together your previous years records showing any ongoing accounts (trips and other) together with their opening balances.

2.     Get your last bank statement for the Private Funds bank account(s) and Petty Cash record if appropriate.

3.     Complete the form below before entering any information.

You need a list of accounts, each with a balance if required and the total of all these balances. You may have some unallocated money and these needs to be entered as a balance against a RESERVES / PROFIT type account.  Add them all up and this is your LEDGER balance.

Now list all your bank accounts from bank statements and any cash held and total these figures up.  This is your BANK balance. List all unpresented items and total these.  This is your UNPRESENTED total.   

Now the balancing!   Your LEDGER balance must equal your BANK balance plus/minus your UNPRESENTED balance.   If it does not - STOP and check and work out why not and adjust as necessary.

Only now should you start entering on PFM.

Set up all Accounts in Accounts Maintenance with any opening balances for each. There is no SAVE button – as soon as you leave a field the information is permanently stored. To add the next account, click on New Short Code at bottom right.  

 When all accounts have been entered, go to Screen Enquiries and Reports and print an Income and Expenditure report – check total for Opening Balances is correct ie equals your LEDGER BALANCE.

Set up a short code account called Unpresented Items if you have any entries from previous period that have not yet arrived on your bank statement. Enter an opening balance for this account that is equal but opposite to the total of unpresented items. (ie if you have written £50 of cheques that are not yet presented, opening balance is £50. If you have £50 of income banked but that has not on statement, opening balance is -£50, if you have £100 of payments, £50 of receipts, opening balance is £50).

Enter any unpresented payments in Transaction Entry – Payments, using the Short Code of Unpresented Items. Repeat for any receipts.

Go back to Screen Enquiries and Reports and print an Income and Expenditure report – check total for Opening Balances NOW equals your BANK BALANCE and the Closing balance total equals your LEDGER BALANCE.

Do you have money spread across several bank accounts and/or petty cash?  If so -

Use Transaction Entry-Transfer – Bank Transfer to allocate part of total money entered to Cash or Deposit/Other Bank Accounts.(Use NEW to create other bank Accounts) ie if you have £1000 of opening balances, of which £800 is in current account, £50 in cash and £150 in deposit, then enter two transfers FROM Current Account TO Cash or Deposit DATE beginning of financial year, REF Opening Balances, AMOUNT £50 or £150).

Your setup is now complete!

Take a backup in Period End – Archives – Backup Data. Whatever happens from now on, you will be able to return to this starting position if needed.

SETUP RECONCILIATION

It is important to get your balances correct from the start when setting up Private Funds Manager, to ensure that checks and reconciliations can be easily made at each month end.

The month end checks will include bank reconciliation and comparison of the bank reconciliation with the Balance Sheet and Income and Expenditure accounts amongst others.

Therefore, it is essential that you ensure that the Bank Statement balance at the end of previous year / start of current financial year reconciles to the individual accounts as follows.

BANK

Closing Bank Balance from previous period                                                                               A

(Use this figure for first bank rec)

(Use combined figure if you have Current and a Deposit Account)

Less any unpresented payments                                                                                                B

Plus any unpresented receipts                                                                                                                                                                                                                                                                         C

Gives Bank Cash Book Balance                                                                                                                                                                                                                                                                       A-B+C   

Plus Petty Cash Tin                                                                                                                                                                                                                                                                                         D

Total Cash Book Balance                                                                                                                                                                                                                                                                                 E

ACCOUNTS

Total of Opening Balances for

individual Accounts                                                                                                                                                                                                                                                                                         F

E=F

If E does not equal F, then there must be some of the total money held in the various bank accounts and cash, that is not allocated to specific accounts (trips etc) but is a reserve or previous profit figure.. For this, set up an account called Reserves (or something similar) and enter the balance between E and F as the opening balance for this reserve account.