Setting up beginning balances is an essential part of getting your new BIS software up and running. By following a few simple steps for entering account and job information, you can save yourself some time down the road. This information will cover setup of regular account balances, AR and AP account balances, existing vendor invoice setup, payroll totals setup and existing job setup. There are several decisions you will need to make along the way that will affect how much detail you will have available from your old system.
Before You Start
You should have taken the Setup I: System Settings, Navigation & Master Files training or be confident in your own setup of the general system information prior to entering beginning balances. It is essential that your Chart of Accounts be completed prior to implementing any of the following. It is also a good idea to have your master files populated before you begin. Master file information can be created on-the-fly however, via the data hyperlinks within BIS.
Several reports should also be printed or available from your old system. These reports will help to facilitate a smooth transition between accounting programs. The Chart of Accounts, Trial Balance, AP Aging for each vendor, AR Aging for each customer, quarterly payroll totals for each employee, billing totals for each job before the last billing and the last billing on each job should be printed or available for entering startup information. Additionally, a Budget and Schedule of Values should be available for each job you wish to initially track in BIS.
Pre-Entry: Account Relationships
When you started a new company within BIS, you probably based your Chart of Accounts on the simple or extended samples within BIS. While it may be modified at this point, it probably does not match the Chart of Accounts in your old system. Because of this discrepancy, you will need to print the Trial Balance from your old system. Compare this to the Trial Balance within BIS (accessed off the Main Menu, under Reports, Financial Statements) and write the correct account number next to the existing one on your old Trial Balance.
Pre-Entry: Suspense Account Setup
The entering of AR and AP information requires the setup of a suspense account. This can be done from the List, Chart of Accounts menu item in BIS. This account is usually placed in the Other Assets section of your Chart of Accounts. The Account Type should be set to ‘Transaction’ and the Job Cost Type should be set to ‘Contract’.
A second suspense account should also be set up for initial payroll entry. Following the same process above, this account should be placed directly below the first suspense account in the Chart of Accounts.
Entering Beginning Balances
All beginning balances are entered through a single Journal Entry found in the Transactions menu of BIS. You will use your Trial Balance and the Chart of Accounts relationships worked up earlier to make the correct entry for each line on your Journal Entry. The only two items whose entries will use a different account than the relationships you’ve identified earlier are the AP and AR items. These may be your Contract Receivable, AP Trade and possibly your Retention Receivable accounts. All these should have the suspense account chosen for its line on the Journal Entry. To check that your Trial Balance is correct, you can print it from the Reports, Financial Statements menu section in BIS.
Recording Vendor Invoices
Next, you will need to enter your open AP invoices. The AP aging report from your old system will help you do this. A Vendor Invoice will have to be created for each item on that aging report. This is done through the Transactions, Vendor Invoices menu item within BIS. For these initial invoices, the suspense account should be chosen as the GL Account in the distribution line(s). Be sure that you are only entering the balance on that invoice. After you are done entering an invoice, you can quickly move on to the next one by pressing Ctrl + N.
Entering Year To date Payroll
The simplest way to enter previous payroll, and still get your important payroll reports, is to enter one Payroll Check for each employee for each quarter or portion thereof in your current Fiscal Year. This can be done within the Transactions menu, from Cash Disbursements, Payroll Checks. Date each check with the last day of the quarter being recorded. On the second tab, Payroll Accounts, set each one to the payroll suspense account. When you enter the hours, you can either enter the total hours worked and the actual hourly rate of pay or record one hour on the hours line, then change the payroll rate for that line to the total quarter to date amount. Make sure the GL account on the hours line is changed to the suspense account. Record the quarter to date additions, deductions and tax deferred items, also using the suspense account. On the Totals tab, record the quarter to date taxes using your prior system report totals. This should be done for each employee for each quarter. Again, the payroll suspense account should be used when entering these past payroll checks.
Alternatively, you can duplicate each Payroll Check given to every employee for the current fiscal year using the method above. This should only be done if check-by-check detail is needed and the change in fiscal year was recent.
Jobs in Progress
It’s important to enter a Budget and Schedule of Values for each job you wish to track from your old system. Note that creating a Schedule of Values is only necessary if you have done a lump sum or cost plus type of billing in you old system for the job in question. If you need help setting up a Budget or Schedule of Values, the BIS Online Help is an excellent resource that will answer many of your questions.
Both the Budget and Schedule of Values should be created manually for each job’s initial setup via the Jobs menu item. They should not reflect current job status. They should be initial Budgets and Schedule of Values.
The next step requires that you create Job Cost Adjustments to account for the current costs on your jobs. This is done in the Job Adjustments section of the Transactions menu. Lump entries may be made for each cost code cost type, or you can create an entry for each item in your old system. It is up to you how much detail you want to show on your job cost reports for these initial jobs.
There are a few ways to accurately reflect the billing that has already taken place on a job. If you have done a progress or AIA billing you will need to adjust the Schedule of Values. If you did a simple Contract Invoice for the job, a similar transaction can be done in BIS via the Transactions, Customer Invoices, Contract Invoices menu item. The total should be for what you have billed thus far on the job and should be coded to the suspense account created earlier.
Billing Setup
A progress or AIA billing, from either a lump sum or cost plus method, requires that you update each line in the Schedule of Values to the state prior to your last billing. This is done on your Schedule of Values, located in the Job menu of BIS. An Application for Payment is then created from the Transactions, Customer Invoices menu of BIS.
To accurately reflect existing job receipts prior to your current billing, you will need to do a Cash Receipt (found on the Transactions menu). Be sure all the receivable accounts on the AR Account tab are set to the suspense account for this billing.
After posting your initial billing history, you will duplicate that last billing done for each job in your old system. Update your Schedule of Values in BIS a second time and create another Application for Payment. For this application, only the income account on the AR Account tab should be set to the suspense account. Having done this, all your jobs should now accurately reflect the current billing.
All subsequent Cash Receipts should use regular accounts versus the suspense account.
Questions?
If you have any questions regarding this process, contact the MICS Support. Additional Online, Internet or onsite training is available to help you through this process if needed.