Monthly P&L

Discussion in 'Accounts & Finance' started by Nicola Gorringe, Dec 2, 2019.

  1. Nicola Gorringe

    Nicola Gorringe UKBF Newcomer Free Member

    5 0
    Hi all, this may seem like a really stupid question to most of you, but I'm not a bookkeeper 'by trade' so I'm learning as I go.

    When I post my allocations to Sage, I do it from the bank download, so use the payments dates. But I'm guessing that I should really input the date according to the month the transaction relates to? ie. if I pay my PAYE in October but it's for the month of September, I should post it to September and if I pay mileage in October but it's for the month of September, I should post it to September? Then I get a true P&L for that month?
     
    Posted: Dec 2, 2019 By: Nicola Gorringe Member since: Oct 10, 2019
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    16,240 3,436
    If you wish to use accruals for your monthly P & L you would need to enter the invoices on the date they relate to, then match the payments when they are made.
     
    Posted: Dec 2, 2019 By: Scalloway Member since: Jun 6, 2010
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  3. CA85

    CA85 UKBF Contributor Free Member

    44 2
    You need to make use of the balance sheet to get "a true P&L".

    Sales ledger, purchase ledger, Wages control accounts, etc.
     
    Posted: Dec 2, 2019 By: CA85 Member since: Oct 9, 2019
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  4. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    13,139 2,457
    Not a stupid question at all.

    Generally when a set of financial accounts are prepared for tax purposes they will include income which has been earned in the period and expenses incurred so if accounting records only show payments made and sales received (which isnt uncommon) the accountant will add unpaid invoices when the financial accounts are prepared.

    If you want your records to enable you to prepare complete accounts/a 'true' P&L you should indeed enter all costs incurred and sales made each month.
     
    Posted: Dec 2, 2019 By: MyAccountantOnline Member since: Sep 24, 2008
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  5. Victoria_V

    Victoria_V UKBF Regular Free Member

    153 19
    Hi There!
    Had a quick chat with our expert accountant and here’s what he had to say:One of the ways that you could get a true P&L for a particular month is by accruing expenses in the month they are incurred.
    For example, if you made a payment for mileage in the month of October, but the mileage relates to September, you may accrue for the mileage cost in September and this should account for the mileage cost in the September accounts. Then, in the October accounts, you could reverse the accrual to net off the payment that you made in October. Payroll may be posted to the month it relates to. If PAYE for a particular month is paid in the following month, an outstanding liability should be shown in the wages control account of the balance sheet for the month the payroll relates to.
     
    Posted: Dec 3, 2019 By: Victoria_V Member since: May 29, 2019
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  6. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    13,139 2,457
    From experience, as an accountant, that could get messy and time consuming. I've seen people try that and after a few months its just become hard work.

    My preference is to either record transactions on a cash basis, or, enter all invoices and receipts and match transactions to those.
     
    Posted: Dec 3, 2019 By: MyAccountantOnline Member since: Sep 24, 2008
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  7. Energise Accounting

    Energise Accounting UKBF Ace Full Member

    1,071 172
    Well as you are a Ltd company you cannot use cash basis Accounting. So in your example you post your Sept PAYE expenses in September. If you then pay in October like most people that is the date you would use for the payment side.

    Like Nicola has pointed out with invoices you match any payments/receipts against invoices. Again using the correct date for when the payments/receipts. were actually made or received.
     
    Posted: Dec 5, 2019 By: Energise Accounting Member since: Sep 24, 2014
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