TAKE ON BALANCES

Author:                   Laura Stewart

Date:                      July 2008

Audience:              Bookkeeping

Summary:              Take On Balances

CONTENTS:

· Introduction

· Prerequisites intended for take on balances

· Business Balances

· Trust Balances

· Inserting accounts in business ledger

· Take on balances

· Bank Reconciliation Take On

· Conclusion

Introduction:

If you are required to take on balances from an existing system certain procedures need to take place.

Prerequisites intended for take on balances:

In order to take on balances we need the following reports and actions from your previous system:-

A complete trust to business transfer must be taken on your previous system if possible.  The reason for this is that it simplifies the accounting because the debit balances remaining on your previous system will then be business balances and the credit balances will be trust balances. (i.e. the value in your trust bank will be equal to the total of your credit balances.)

If this is not possible then you will need to identify and separate the trust and business balances. You will need to identify your reserved balances (if your previous system used this method) and your invested Section 78(2A) balances.

You will also need a trial balance from the previous system showing all your nominal and balance sheet accounts.

Create your business ledger accounts on your trial balance by doing the following:

Inserting accounts in Business Ledger:

· Click on the Business Ledger icon

· The Business Ledger screen will appear (Fig 1):

Fig 1: Business Ledger Screen

You will notice that there are accounts listed in the business ledger browse already. These are the LegalSuite default accounts and these must not be deleted.

You will now need to insert the other accounts that appear on your previous systems trail balance and you do this as follows:

· Click on the insert icon.

· The following screen will appear (Fig 2):

Fig 2: Record Will Be Added Screen

The two main accounts needed for the take on are the “Business Suspense Account” the type being current liability as well as a “Trust Suspense Account” the type being trust bank. These should already appear in your list but if they don’t please create them.

· Open up all your accounts in the business ledger.

· You will now be ready to start capturing your take on balances.

· This is done via journals.

Take on Balances:

· Click on the batches icon

The following screen will appear (Fig 3):

Fig 3: Batches Journal Screen

· Click on Normal.

· The following journal screen will appear (Fig 4):

Fig 4: Journal Will Be Added Screen

In this journal there are two parts. The top block being the debit part of the journal and the bottom block being the credit part of the journal.

To capture the Trust balances you will debit the Trust Suspense Account and Credit the appropriate matter.

To capture the Business balances you will debit the Matter and credit the Business Suspense Account.

To capture business income accounts you will debit the “Business Suspense Account” and credit the income account concerned. Remember you will do this for all liabilities and other credit balances on your previous systems trial balance as well.

To capture business expense accounts you will debit the expense account and credit the “Business Suspense Account”. You will do this for all assets and other debit balances on your previous systems trial balance as well.

Print the Matter Balances (Trust and Business) report on the listing menu under the “Matter” button in LegalSuite and compare the balances on the previous systems reports. The reports button is the one next to the exist button on the top right hand side of your screen. If they do not equate then find out why and correct them.  This is very important as the auditor must have a starting point on the new system that balances.

· To capture matters with investment balances, click on batches icon .

· Click on the Investments tab. The following screen will appear (Fig 5):

Fig 5: Investments Screen in Batches

Fill in your matter’s details and make sure the type is set to “Direct Deposit”.

A Trust Journal must be done to now clear your “Trust Suspense Account” by debiting your Trust Bank account/s and crediting the “Trust Suspense Account” with the applicable amounts. The “Trust Suspense Account” should now be zero.

When you have completed your take-on your “Business Suspense Account” and your “Trust Suspense Account” should be zero. If this is not the case you need to notify your auditor and they should help you to rectify this.

Bank Reconciliation Take On:

Outstanding cheques and receipts from a previous system need to be brought in as take on balances on the bank recon in LegalSuite.

To access the bank recon click on the business ledger icon.

The following screen will appear (Fig 6):

Fig 6: Business Ledger Screen

· Click on the bank reconciliation icon .

The following screen will appear (Fig 7):

Fig 7: Bank Reconciliation Screen

Select the correct bank account and click on Edit and select Take-On.

The following screen will appear:

· In this block right click and insert.

The following screen will appear:

You will fill in the outstanding individual cheques and receipts here. You can change the description, period and date for the transaction take on and in the Amount field you will fill in cheques as a positive figure and receipts as a negative figure.

Click OK.

The following screen will appear:

You will now post the transaction and it will then be sitting on the bank recon.

Finally

After the take-on has been completed make sure that you keep copies of the Trust and Business balance reports, the trial balances, as well as the bank reconciliation of both systems for the auditors.

Conclusion:

This whitepaper will assist you in bringing over balances from an existing system to a new system.