Remove accounts from general accounting or delete information?

Hi everyone,

We have decided to go a different way with our accounting. Previously I would track the directors personal account, credit card and loan expenses as this business was previously a sole trader.

Whilst being a sole trader he used his own account and cards for business as well as personal. We are now a P/L company and I have spent that last year or so training him

to use only the company accounts. Unfortunately banking issues have forced times where a personal card was used or a personal account instead of the business. I reimburse these transactions back and all this is captured in the system.

What we would like to do is remove all personal accounts from Reckon. Mostly because any time we view the company snapshot or other reporting these personal expenses are also being taken into account so it makes us look super profitable even when we aren't.

I can't find a way to select only certain accounts to be used by the system.

What I want to know is do I need to delete all personal transactions from these accounts, Or is there is a way to only nominate certain accounts?

I would only be deleting up to the start of the financial year and not any business transactions, only personal ones. We were previously reconciling all accounts including personal ones so that the system balanced in its entirety. I will still need to have the personal account and credit card set up for those instances where a payment or reimbursement is necessary but I don't need to reconcile those accounts.

Thank you.

Comments

Acctd4

Hi Rhodes Biloela Pty Ltd

If you created these accounts as “business” ones (eg Income/Expenses/Assets/Liabilities) to start with then the program doesn’t know that they’re actually personal, meaning by default, they’ll be included in all reporting.

There are a few options though …

As you’ve said, you could delete all the personal transactions or

You could re-name any personal income/expense accounts used (eg “Groceries”), to match the name of the account the personal expenses were previously being posted to (eg “Drawings”). This will prompt the system to recognise that the account already exists & will ask if you want to “merge” them. This will automatically move all the transactions for you, under the one personal account or

I don’t believe this is possible for the Company Snapshot feature specifically, but certainly within most of the actual financial reports - eg Profit & Loss, Balance Sheet etc - you can filter to show specific accounts &/or account types then once created/displaying as you need, memorise it for re-generation at any time.

          (The only problem with this of course is, any time you create any NEW accounts, you
          may need to remember to filter again to add these, then re-memorise to update your saved
         version)

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

Kylie Stewart_9162934

Hi Rhodes If the business has changed from sole trader to pty ltd then to my knowledge and recommendations are you start a new data file to reflect the Company ABN requirements. You can can export all of your lists i.e. customers, suppliers etc and then import them back into your new data file. Bank accounts will be new and different also. When you start a new data file as a Company then QuickBooks will automatically add a lot more account options for the process to be easier with personal transaction recording. I apologise if I have misunderstanding of the above questions and best of luck either way.

Kwikbooks (Professional Partner)

Hi Rhodes

Totally agree with Kylie, if you have gone from sole trader to company a new company file should have been started. Chart of accounts are different, ABN is different, TFN is different, it is much cleaner than changing the title on the old file and changing ABN etc.

Import lists as Kylie also suggested, even if you import some things you don't want in the lists, you can then delete them easily before you apply transactions.

if you have a lot of transactions so far then you can export the ones you want to excel and import in the new file.

If you are on hosted, you can have both on the cloud for as long as you need them.

A new file also makes sense if you still need to finish trading in the sole trader i.e pay outstanding bills, send remittances etc. If you have changed the sole trader name to company you cannot do this anymore.

Acctd4

The poster indicated the entity change happened a year ago so I was assuming this was IN a new file as the ABN & TFN would have changed back then ? If not then yes, I definitely agree with Kwikbooks & Kylie.

Graham Boast

Hi Rhodes

Leaving aside the issue of whether to create a new company or not, I think the issue you have is how the transactions have been entered into the system.

The only way that the type of transaction would affect profitability is if the reimbursement has been entered against an income or expense account rather than as a Capital Introduction (Equity) account.

My business is a partnership, so I have occasionally used personal accounts for business expenses and business account for private expenses. Both go through equity accounts (capital introduced and drawings respectively) and neither affect the P&L.

Re-coding the transactions correctly is a better and safer option than deleting them.

Graham 0409317366
graham@reckonhelp.com.au

Kwikbooks (Professional Partner)

Hi Rhodes

Whatever you do with this financial year transactions you will still have all the old personal Asset & Liab. acccounts in the file, plus the new company ones you created. You can never delete these because there are transactions attached to them.

The best you can do is make them all inactive, so the ones you want only show up on the balance sheet or trial balance, you can still use the expense accounts. Unless you have tracked any personal expenses to the accounts this financial year you can still have an accurate P&L.

If you went a company part way through the year, and/or still need to track personal expenses, then you will need 2 lots of Income & expenses. set up a PERSONAL exp acct and pull all the personal expense accts under it as sub accounts - do the same for COMPANY, create a company Head acct and create your new company sub accts. Same for Income.

When you do your P&L/'s you will have to filter the reports, one choosing all the personal accts, one choosing all the company accounts. Same for Balance sheets and any other reports required.

Or you could add class tracking and simply add personal or company class to all transactions, and then pull out P&L by class.

Rhodes Biloela Pty Ltd

Hi Kylie,

thanks for the suggestion. The system already has the business set up as a company which is possibly part of the problem, but for a long time and occasionally still we needed to be able to reflect some of these expenses as company ones because the personal account was used for whatever reason so we did need to track those expenses.

originally our accountant wanted to be able to see everything and have it reconciled as my boss has other financial interests so that made their job easier in that they could just filer the type of expense or income they wanted to see and all the accounts were integrated so I couldn't really have two company files and have the bank accounts flow that would create a lot of extra work for me having to double input everything into multiple company files so doing it as one was easier and how it was set up when I started.

Now they don't want to see all this extra information and I have no need to balance and reconcile the personal accounts so I can just enter business related transactions rather than everything. the trouble is that I can't see a way to designate what is personal and what is business in a way that doesn't show and contribute through the company snapshot.

I don't mind leaving all the transactions as they are or even modifying their relationship but I can't find a way to stop personal transactions showing in the snap shot and more so contributing to the overall figures presented in the snapshot.

I don't know if this explanation is any clearer to be honest lol. I just want to move or hide these unnecessary transactions so they don't contribute to the overall figures.

maybe just zeroing anything irrelevant is easier?

Rhodes Biloela Pty Ltd

yeah its already set up as a company. That's not my issue. but thanks for thinking of that.

Rhodes Biloela Pty Ltd

Oh this is helpful! thank you.

So these are mostly personal transactions thought like groceries, day to day expenses and the like. Its not really equity. Will that matter? I'm going to look into this now but I would appreciate your thoughts on that.

Thank you!!

Rhodes Biloela Pty Ltd

Thanks, we already have it set up this way as i do need to track some expenses and transactions from personal accounts in the company for various reasons. I can filter the reports you are correct but I am not the one with the issue lol. My employer who is not so adept at this needs to be able to open up the company snapshot and see exactly what he wants to see. Right now its not what he wants and as our accountant have changed their mind about what they want to see I am just looking for a solution that creates the least amount of work and preserves the transactions already entered as required.

I am most concerned about what appears in the company snapshot which is an overall not what I can include or filter into reports.

Thank you for your input though. I really appreciate it and the time you gave to help me out.

Rhodes Biloela Pty Ltd

Hello, thank you for replying.

I'm not sure I understand what you mean in point two. I would be happy to rename the transactions or move to a different account type.

We already have an account in the chart of accounts set up as 'personal expenses' which was specifically made so that we could filter in or out personal expenses and all the different sub-types so that these could be easily tracked/reported on etc.

Because they are expenses though they show up as an expense with all of the other expenses and same for any incoming transactions. This was specifically set up some time ago on advice from the accountant so that certain things could be tracked as an overall. I wasn't and am not a fan of this way of dealing with it but it was a simple way of doing it at the time and I don't get to call all the shots.

So yes I can already filter all this through a report. These transactions have always been coded to these accounts so there isn't anywhere to divert them back to and renaming the accounts won't change how they are handled in the reporting avenues of Reckon. The account type themselves need to be changed. So unless there is a way to make a certain type of expense account hide or not be accounted for its needs to be something other than 'expense'. Even though that is exactly what these transactions are. they are just personal expenses.

What I want though is for these items to not show in the overall. So unless coded otherwise I don't want to them show in the overall company snapshot because it is not a true snapshot of the businesses in and outs. I'm more than happy to re-code the transactions to something other than expenses i'm just not sure what. Equity isn't really right and its not capital, def not an asset or a liability.

Rhodes Biloela Pty Ltd

to be more clear. The issue isn't sole trader vs company. the issue is using personal bank accounts for business purposes because they used to be a sole trader and old habits die hard so we are working on stopping the owner using his personal accounts to deal with business transactions but the tracking of certain expenses is more complex than that so I want move personal transactions that don't impact the business so that they stop showing in the finances. The obv solution now that the accountants and owner have decided this is to stop entering anything I don't need which I have done. This leaves me with all of the previous transactions entered and how I move them/ reallocate or delete. But I need some of these transactions so I can't shut down the bank accounts and I cant just delete the entire personal expenses account.

Perhaps I wasn't clear enough before the sole trader company thing was context as to why but it has no bearing on the company now.

Graham Boast

Hi Rhodes

If it was a sole trader or a partnership, then it is really equity. Equity in these structures usually has Capital Introduced (Money In) and Drawings (Money Out).

So my suggestion is:
- create an equity account called "Drawings".
- If you have several Expenses accounts for private expenses (eg Groceries, Netflix), edit each account and change it from an expense to an equity account, save, then make them a sub-account of Drawings.
- you may have to re-code some transactions if you have Bunisess and Private expenses under the one account (eg "Petrol")

Once you do this, your P&L will just reflect business P&L

Graham

Rhodes Biloela Pty Ltd

We aren't a sole trader. We used to be which is why he was used to using his personal accounts and hasn't quite canned the habit. For this reason we run all accounts on the system so that I can account for the odd indiscretion here and there. We are a pty ltd company. so I can't really use any of those accounts you mentioned because none of these transactions fall under any of those categories or account types. They are expenses just personal ones that we no longer need to track. So i am trying to work out if there is a faster way than just deleting or zeroing these amounts. By the sounds of it no one here can move past the words 'sole trader' so I think I have my answer. I just need to zero everything that is now irrelevant.

Thank you for your time. i appreciate it.

Acctd4

Hi Rhodes

For personal transactions that occurred whilst still a Sole Trader, these can be under an Equity Account so just change the Account Type(s) of the existing personal “Expense” account(s) to an Equity account:

Right-click on the Account in CoA, click Edit Account & select “Equity” from Account Type dropdown list

(NB You will need to change subaccounts FIRST, then the Header)

HOWEVER ....

Any personal transactions that occurred AFTER the entity changed to a Company structure will need to be captured under an Other Current Asset-type account usually referred to as a “Shareholders Loan” (or “Directors Loan”) Therefore, create a new Other Current Asset-type account called “Director’s Loan”.

(This is because the accountant needs to review this expenditure at EOFY as it may be taxable income to the director &/or need to be re-allocated)

Once you’ve changed the account type(s) as per my first paragraph, run a report on that equity account(s) from the date the company structure commenced to date & re-allocate any of those transactions to the new “Director’s Loan” account.

The above should solve your issue – I believe the Company Snapshot only reports on Income & Expense-related data so once these personal transactions are re-classified under Equity & OCA, they won’t appear here or in the P&L.

If necessary, you can omit the old Equity ones from displaying on the Balance Sheet – by modifying/filtering that report.

The “Director’s Loan” ones should remain as this personal expenditure by the Director forms part of the company’s financial status.

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

Graham Boast

Ok - my bad - I thought you were talking about the old transactions and really should have re-read the earlier posts.

For personal transactions from business accounts, the "expense" side of the transactions goes to a Current Asset account called "Loan to Directors". You could edit your currenty "personal expenses" expense account and rename it "Loan to Directors". The old reimbursements would also get coded to this and it should all zero out.

For business transactions from personal accounts, you can set up a dummy credit card called "Directors Personal Funds". When the director spends money from personal accounts (personal account/credit card/ cash) on a business expense, this can be correctly recorded as a business expenses with the appropriate GST code.

At the end of the month/quarter the reimbursement is posted against this dummy credit card, bringing the balance back to zero.

Deleting or zeroing the transactions is not only a lot of work, but a potentially hazardous exercise if you delete something you shouldn't. I really don't think the presence of the transactions is the issue - more the way they have been coded.

Shaz and Kwikbooks are both excellent bookkeepers - a consultation with either would be money well spent and they could guide you on how to best get the transaction out of your company snapshot.

Graham 0409317366
grahjam@reckonhelp.com.au

Rhodes Biloela Pty Ltd

Thanks for the assistance, i'm afraid though you are completely on the wrong track with what I am asking. Perhaps my question was not clear and that's my fault. The issue has nothing to do with being a sole trader. I cannot reallocate these expenses to be anything to do with a directors loan or any other type of equity or income because they are not those types of expenses. Thank you for your time, I really do appreciate it.

Rhodes Biloela Pty Ltd

The problem is that any credit cards or other accounts still show as an income or expense on the snap shot so I could reallocate it but everything is already allocated to a personal expense account so I would just be doing the same thing again and it wouldn't solve the problem.

I also could not make the transactions assets because it could make it look like we have something we don't have. We aren't 'loaning' money to the company via the director, or I guess we are in rare instances but those aren't the transactions I am concerned with. because we aren't 'loaning' money we aren't paying it back and it would still show up an expense against the company which means even if its in a different part of the ledger the affect is still the same so it doesn't actually solve the issue it just moves it somewhere else.

I'm not worried about 'deleting' the wrong thing

that's not a concern at all.

Thank you for your assistance, I really appreciate you taking the time to bounce some ideas for me. ?