This chapter covers how to set up MoneyWorks, and, at fourteen pages of riveting prose, is somewhat longer than we would really like. Don’t be fooled by this: setting up is not necessarily difficult. We’ve tried to cover every contingency and possibility, and for the more accounting-inclined, talk about the underlying philosophy as well. If you are just the average punter (especially if you are a Cashbook user), you can probably ignore most of this.
But nor do we want to lull you into a false sense of security. It is important to get the setup as correct as possible. Mistakes made here can come back to haunt you later—get the starting bank balance wrong for example, and your bank reconciliations will be a little tricky1.
Of course if you are starting a new company the setup is much easier: there is no “baggage” that needs to be recorded; no historic balances or outstanding transactions. However most people are not in that situation.
So before you start, it is important that you are well organised. In particular, you need to have the correct information available. For Cashbook users this is normally just a bank statement or two; for others you ought to also have the details of any outstanding transactions (these are explained a bit later on).
Tip: If you are new to MoneyWorks and haven’t done so already, work through the Tutorial before you attempt to set up. That way you will be able to find your way about in MoneyWorks, create transactions and so forth. Consider this more of an edict than a tip.
Tip: If you are setting up your file based on an existing MoneyWorks one, use the Save a Clone as command.
If you are using MoneyWorks Cashbook, or are in a hurry, here’s an outline of what you need to do, and where in the manual you’ll find how to do it:
- Create a new file
This is just a common or garden file that sits on your computer and which stores all the information that you have entered into MoneyWorks. You should give it a sensible name, and make sure it is in a sensible location (because you will want to back it up every so often!). Creating a file is discussed in the aptly named Creating Your New File.
- Set your financial/fiscal year
You need to tell Moneyworks when your financial/fiscal year starts—this is normally your tax year (although for personal accounts you might prefer a calendar year). It is important to get this right as it cannot be changed easily later. This is discussed in Periods.
- Optionally choose your chart of accounts
A chart of accounts is just a coding structure for allocating your income, expenses etc. MoneyWorks comes with a number of account templates from which you can choose, or you can create your own. If you choose one of the pre-supplied templates, you can of course modify it later.
- Enter your opening bank balances
These are taken off your bank statement(s), and can be entered as part of the setup process (see Bank Balances).
- Enter outstanding historic transactions
If you are using Express or Gold, you should really enter any historic transactions that are still outstanding (and this is where things can start to get a bit tricky). By “outstanding” we mean invoices that are not yet paid, and cheques that have been issued but not yet presented (see Accounting for Unpresented Items and Entering Opening Payables & Receivables). It is better to enter these at the outset, otherwise they will suddenly appear on your bank statement in the future, and you won’t know what they are for.
- Enter your opening stock
If you are running an inventory system, you will need to enter your opening stock on hand.
- Enter your opening balance sheet
If you want a complete set of accounts (and most businesses do, because (a) it is a legal requirement, and (b) you need to know this stuff if you are to run a successful business), you should also enter in the current balances for your existing chart of accounts (the faint hearted can defer this and leave it to their accountant to do later if they want). This is covered in Entering your Balance Sheet.
- Check the Tax Table
The tax rates you use might be different from the ones that we supply. See Check Your Tax Rates
And that’s basically all there is to it. It’s not hard, but because this is the probably the first time you have done it, it is not necessarily easy either. Just be careful and be methodical, and if it all gets too much, you can always get a MoneyWorks consultant or your accountant to give you a hand.
1 Something like an incorrect opening bank balance can be corrected later on, so is not a disaster. But better (and much easier) to get it right at the outset. ↩