Setting up a new client

The following steps are usually taken in setting up a new client if it has a Nominal ledger:

1. The client is created and the first accounting period is defined as running from a very early date (e.g. 01/01/1930 up until the last year end). This is defined the first time you select the client in the client list after creating the client.

The This Year and Last Year dates form the posting window for Investment ledger transactions in the first period in Trust Accounts to allow the full Investment History to be entered if required. the Trial balance will be entered as at 

2. The Balance Sheet is coded up and posted as a journal to the Balance Sheet accounts with the following changes:

• The balance on the Capital Account is posted to the Capital Account B/Fwd. Similarly the balance on the Income Account is posted to Income Account B/Fwd. If either of these accounts are split by beneficiary then the posting needs to be split by beneficiary.
• The balance on the Investment ledger (i.e. Investments at cost as per the investment schedule), is posted to the Suspense Account.

3. The individual holdings are then ‘bought from the Suspense Account’. In other words a series of investment purchases are made with the Logged-In Account set as the Suspense Account. The idea is to recreate the capital history of the holding so that the CGT is correct on subsequent disposals. At the end of this process the Suspense Account should have a zero balance and all the cost should have been transferred to the Investment Cost account. There are a number of variations on this process depending on circumstances.

• It is not necessary to write up every purchase and sale, only the ‘unmatched acquisitions’ (i.e. acquisitions unmatched by a subsequent disposal). Also for transactions prior to 17/3/98 it is only necessary to write up the value of the 1982 pool and the s104 pool using one transaction for each pool. So if the pool values and subsequent unmatched disposals are available (e.g. from another CGT system), then just these transactions can be written up, greatly reducing the number of necessary entries. This is usually done using movement codes:
  • P82 - 1982 pool
  • P98 - s104 pool
  • ACQ - Acquisition
• However, the source data may not come from a CGT system. In this case it may be necessary to enter the full history or possibly estimate the balances at 17/3/98 and enter the full history since. If purchases and sales are entered, this results in a profit on disposal being posted. At the end of the process the Investment account shows the correct cost, but the Suspense Account does not zero and an opposite balance is shown on the profit on disposal account. An extra journal is needed between these accounts.
• Sometimes producing the accounts is the top priority and there is not enough time to write up the full capital history, so you enter just an opening balance for each holding which is correct for accounting purposes. Then later on when there is a quieter period you go back and delete the opening balance and replace it with the full history. Trust Accounts allows this even though all the entries are before the start of the current year. These entries are referred to as Prior Year Entries. After a Year End, adding or deleting Investment ledger entries has no further effect on the Nominal ledger. So as long as the new entries give the correct CGT position then the data is correct.

4. Finally, a Year End is performed which produces the correct opening Trial Balance.