Brightpearl will allow you to keep track of a number of asset accounts, such as your high street bank account as well as directors' or staff personal accounts. Click Accounts - Banking from the main menu to view them.

Any nominal accounts can be set as a bank account in the Accounts - Setup - Chart of accounts screen.

Setup

You should create a separate bank account for each credit card holder that makes transactions on behalf of the company, each actual bank account that you hold with a high street bank, and each payment provider that may hold funds for you until they reach your bank account (such as a credit card sales provider).

This could typically be;

• Main bank account
• Savings bank account
• Credit card sales account (eg Lloyds CardNet)
• Director's credit card ending 3345
• Business credit card ending 4252

You should reconcile (match up) your Brightpearl bank record with your actual bank statements on a regular basis.

Click here to read about bank reconciliation

Statement import is a powerful feature which allows you to upload your Excel bank statements directly into Brightpearl. Once the statement is imported, each entry can be matched with an existing accounts transaction, or used to create a new accounts transaction straight from the import screen with a couple of clicks.

Follow these steps;

1. Log on to your online banking and export a statement. See file formats below.
2. Log in to Brightpearl and visit the bank accounts list. 
3. Click the "import/match statement" link for the relevant bank account
4. Browse to your file and upload it.
5. Click "match transactions"
6. Click an entry on the left to match with possible transactions on the right

Once the statement is imported you click the "match transactions" link, which will show all unmatched entry on the left of the screen. When you click on an entry, Brightpearl will search the database for any unmatched transactions for the same amount. If there are already accounting entries in the system for this amount, they are given a score depending on the likelihood of them being the transaction that relates to the statement entry. At the bottom of the possible matches you are given the option to create a new bank transaction, using the reference and date as per the imported statement.

File formats

Brightpearl accepts OFX files (which most banks will export), and if you can't get an OFX file then you can import an Excel file.

Formatting an Excel file

1. Export a CSV or Excel file from your online banking
2. Save this statement to your computer and open it.
3. Reformat so that the first column is the date, the second column is the reference and the third column is the amount, with a positive value as a bank deposit and a negative value is a bank withdrawal.
4. Save the statement as an XLS, with no header row.

Duplicate entries

Brightpearl will check the database for possible duplicates: the import process will ignore entries that have already been uploaded. Duplicates are matched using the same reference with the same amount on the same day. If in fact there are two genuine entries on the same day for the same amount with the same reference, you will need to edit your Excel import so that the references are not the same, otherwise Brightpearl will only import one of the two.

Scoring

To score possible matches, Brightpearl checks the statement entry with the transactions already entered into the system, using the date and the reference along with the customer/supplier name and code if relevant. If you find that a customer is paying you by BACS with a reference "LLBS 001", where the company name in Brightpearl is set as "London Light Bulb Sales", you can enter the LLBS code into the contact data to increase the score.

Which transactions are searched for matches?

If you are importing a statement for the primary bank account (which is usually code 1200), Brightpearl will check for existing, umatched transactions on that account, as well as checking against all outstanding supplier and customer invoices.

What are the limitations?

If multiple Sales Invoices are cleared in one payment, the combined total on the statement entry will not match any existing transaction in Brightpearl. In this case you will need to manually allocate a sales receipt against the multiple invoices, and this payment can then be matched against the statement.

Correcting mis-matches

If you match an entry by mistake, you can un-match it using the Accounts->Search screen. List the activity for the relevant bank account for the relevant time period. All matched transactions will be shown with a small green tick icon on the right of the page. Clicking this tick icon will unmatch the transaction and it will reappear in the list to be matched on the matching screens.

Deleting imported entries

You can delete an imported entry using the match screens by clicking the cross icon on the relevant statement entry.

What if I have transactions on my bank account that do not match a statement entry?

If the transaction has not been reconciled against the bank account or for a VAT return, then you can zero the transaction and change the bank account nominal code to the suspense account to move it out of the way. This is done in the transaction correction screen (click a transaction ID on the left hand side of the Accounts->Search screen).

If the transaction can not be zeroed, and it should not be on the activity for that bank account, then we suggest that you create an equal and opposite transaction on the same date. These two transactions can then be matched as "void" by clicking the red exclamation icon. A void transaction is marked with a blue exclamation icon.

Tips

HSBC statement download

1. Visit "Recent transactions"
2. Scroll to the bottom and click "download statement"
3. Choose one of the OFX formats (it doesn't matter which)
4. Download the file

It's important to make sure that the banking transactions in Brightpearl match those in your bank account, and a regular check will keep everything in order. This check is called reconciliation.

Setting an account up for reconciliation

You won't want to reconcile all of your accounts - only the ones where you have access to a regular paper or electronic statement. To mark an account so that Brightpearl prompts you to reconcile, visit the Accounts - Setup - Chart of Accounts and edit the relevant account. You can set any of your nominal accounts to be a "bank account" due for reconciliation.

Reconciling with an electronic statement

If you import electronic statements, then you can reconcile using the transaction matching process, and you can skip the traditional "opening and closing balance" method if you want to.

To import and match against your statment, read the instructions here:

http://www.thisispearl.com/importing-statements-c-419.html

Each time you match a transaction in Brightpearl against an entry in your statement, it will be marked as reconciled.

Reconciling with a paper statement

If you are working with a paper statement, perhaps from your bank, then it's generally easier just to use the traditional reconciliation process. This involves entering your statement start and end dates, along with the start and end balances, so that when everything matches up OK the difference between Brightpearl and your paper statement is zero.

Create the statement

1. Click Accounts : Banking, then from the banking menu choose the relevant account to reconcile. 
2. Click the link at the top of the screen to create a new statement. 
3. Enter the details from the statement. Note that a statement can't start on the same day that the previous statement finishes, so you may need to enter the start date 1 day later than it says on the paperwork.
4. Save, and you will be taken to a screen that lists all the transactions in Brightpearl that fal between the statement start and end dates, along with all prior unreconciled transactions.

Making corrections

To unreconcile or reverse reconciliation of a given statement, Click the 'reconcile' link for a given bank account to view the list of statements reconciled. Then click 'Clear all' to the right of the statement listing to revert the reconciliation for all transactions on the given statement.

Read more about correcting journals here

Reporting

You can quickly see which bank accounts have unreconciled transactions on the bank accounts screen - they are highlighted with a red link. There's also a bank reconciliation report, which can be reached from a link on the bank accounts screen when a bank account has unreconciled transactions.

The "Bank account activity" report will also show which of the transactions are reconciled with a green tick on the right hand side. You can filter the Bank Activity Report to show just unreconciled transactions if you need to.

Use the Expenses screens in Brightpearl to manage personal expense claims, ie money that you've paid from your own pocket on behalf of the company. Note that Expenses are different from payments made from a company bank account or credit card, which should be handled differently.

How it works

Expenses are entered by an individual, one by one, to make up an Expense claim.

Once the claim is ready, the claim is submitted. All expenses ticked will be submitted.

If the user entering expenses has permission to approve expense claims, then the claim will be automatically approved at the same time.

Approving an Expense claim will create journal entries in the accounts, using the approriate codes, dates and amounts from each Expense.

A user can add any number of expenses into the system, and will later select a few to submit as a Claim.

Setting up

Expense Accounts

Each staff member that is allowed to submit expenses should be given an expense code. This is typically a liability account, such as 2000, since the usual balance on this account will be owed to the staff member.

To set the expense account for an employee:

1. Create the expense code at Accounts : Setup : Chart of Accounts. We suggest 2000 to 2050
2. Visit Setup : Staff licences and permissions
3. Edit the employee and choose an expense code from the Financials tab.
4. This employee will now see the "expenses" menu item in the accounting area. You may wish to turn off permission to access more accounting features such as reports.

Expense Codes

You choose a subset of your nominal accounts to be available as "expense codes". Set these up at Accounts:Setup:Chart of Accounts. Create new codes, or edit the existing codes. Typically your expense codes will be in the 6000 range. For example:

6020  Telephone            T1
6030  Telephone - mobile   T1
6040  Postage              T0
6050  Stationery           T0

It's important to set the correct tax codes in your Chart of Accounts, since they will be used to calculate the tax component of the Gross expense amount entered. If you add an account description, then this will be displayed to the user when they choose the code.

Permissions

To prevent a user from Approving claims, set up their permissions at Setup:Staff, Licences and Permissions.

Adding expenses

Ensure you're working with the correct employee from the menu at the top of the screen.

1. Click Expenses : Add Expense from the accounts menu.
2. Choose the date.
3. Choose a category, enter a description, and the gross (total) amount.
4. Upload a file (image of a receipt for example) if you need to.
5. Click "Add"

If the expense code is taxable, then the tax component of the expense will be added. If you're on the Flat rate VAT scheme, then have a look at the separate documentation for Flat rate.

The expenses will be added to the open claim, but will not be added into the accounts.

Submitting the claim

Just select the relevant expenses, and click the "Submit" button.

Approving claims

If you have permission to approve claims, then they will be approved automatically when you submit them.

To submit claims from other users:

1. Visit Expenses : View expense claims from the accounts menu.
2. Select the claims to approve
3. Choose Approve from the drop down menu
4. Click Submit

Cancelling and deleting claims

If a claim has not yet been approved, you can delete the claim from the Expense claims list using the trash can icon on the right hand side. If the claim has already been approved, then accounting transactions exist, but you can still cancel a claim if it was entered in error. Select the claim from the expense claims report and choose to "cancel". This will zero all the transactions (expenses) and update the claim status to "cancelled". You need permission to approve claims to cancel claims.

Paying claims

Paying a claim will enter a bank payment from your bank account into the employee expense account, and mark the claims as "Paid".

1. Visit Accounts : Expenses : View expense claims.
2. Select an employee from the advanced options.
3. Select the relevant expense claims, the total will be shown.
4. Choose "pay" from the drop down menu.
5. Select the bank account, enter a reference and the payment date.
6. Click "Mark as paid".

Recharging expenses to clients

If you are incurring these expenses on behalf of a client, then you can create an invoice quickly off the back of the claim. When submitting the claim, ensure that you select the client name, and if relevant, a project too.

The claim will be allocated to the client. An invoice (draft) will only be created if you use the "invoice" button.

The following screen shots show the expenses, the choice of client and the invoice (draft) created when the invoice button is clicked.

... then the invoice:

An example of some of the journals created for the expenses submitted on this claim:

Exporting expenses and claims

Just like any other report in Brightpearl, you can export to Excel or PDF, using the options at the top of the report centre:

Basic Principles

It's quite likely that your accountant will be using software called IRIS to produce your Year end results. This page is for the accountant.

Your IRIS system will have it's own code structure, which is different from Brightpearl. We have an extra field in the Chart of Accounts to support your IRIS "Map code", which allows a number of really handy features:

Display the IRIS map code in place of the Brightpearl nominal code for data entry screens, drop down menus and reports, if you are using Brightpearl purely for internal-only accounting.

Export a Trial balance already mapped to your IRIS system, or display the existring Trial Balance including the IRIS codes:

Setting up

To display the IRIS Mapping Codes in place of the Brightpearl codes:

1. Visit Setup:Options:Finance
2. Choose "Mask Nominals" = yes
3. Choose "Show map codes" = "yes"
4. Save

To add a Map code to a Brightpearl nominal code:

1. Visit Accounts:Setup:Chart of accounts
2. Click the pencil icon to edit a code
3. Add the Map code
4. Save

Creating the Chart of Accounts

If you're setting up a new client, then you can import the Chart of Accounts from Excel, including your IRIS Map code. This means that you can have a default set for your practice, and load this each time you create a new client account.

Read more about importing accounts from a spreadsheet.

You can export your full Chart of Accounts at any time using the Trial balance report, or the link at the bottom of the Chart of Accounts screen.

Exporting a Trial Balance for IRIS

Just visit the Reports : Trial Balance screen, open the Advanced options, tick the "show map codes" box, then click "GO". You can export this to Excel using the drop down to the left of the GO button.

Importing a Trial Balance from IRIS

We've built an import tool that will take your Trial Balance, using IRIS map codes, and import directly into Brightpearl as an opening Trial Balance.

1. Ensure you have your map codes set up as above.
2. Prepare a CSV file, with the amount in Col A, and IRIS Map code in Col B. Brightpearl ignores other columns.
3. Visit Setup:Import data from the Brightpearl main menu.
4. Click to import IRIS TB
5. Choose the Opening Balances date.
6. Import. Simple!

The following image is the first few rows of the IRIS CSV file. Note that each code should only contain ONE value, so if rows 3 AND 4 in the file (both with map code 735) were to contain a value in Col A, the import would fail. You'd need to consolidate rows. Make sure that each of your Brightpearl nominal codes only maps to one IRIS code.

The following images show the accounts after the import:

Correcting an accounts entry

Brightpearl will allow you to amend an entry until it has either been reconciled with the bank account or reconciled for VAT.

There are two ways to get to the journal you need to correct:

1. Click a Brightpearl journal ID to take you to the details for the journal. The journal ID is to be found on the left hand column when in the search accounts screen, and also elsewhere in the accounting area.
2. Click Accounts -Tasks - Corrections and enter the required ID.

You will need to enter a reason for the correction, and the previous copy of the journal will be saved in the history to maintain an audit trail.

You can set your system up so that only certain members of staff are allowed to make corrections, using the Setup - Licences and permissions screen.

Journals that can't be corrected

If you've reconciled part of a journal against a bank statement, then that entry cannot be changed. In a similar way, if a journal has been reconciled on a VAT return, then it's locked and you can't edit it.

Cancelling a transaction completely

To undo an accounting entry, you need to zero it off. You can't delete journals for audit reasons, but you can clear it away:

1. Open the correction screen for the journal
2. Click "cancel journal"

This will remove all invoice references, zero the amounts and move the nominal codes to 9999 Suspense account. The previous version of the journal will be in the audit trail.

Things to watch out for

Don't put a Sales Invoice on a supplier, or a Purchase Invoice on a customer.

Don't duplicate the same Sales Invoice refernce for a customer. Two different customers can share the same reference (though this shouldn't happen unless you're putting bad data in) - same goes for suppliers - each supplier cannot have two Purchase Invoices with the same reference, otherwise the payment allocation screen won't work properly.

Don't just make a simple correction to mark an overpayment. You'll need to leave the payment value matching the invoice value, and add an extra row to the journal to record the overpayment as below.

Recording an overpayment after the allocation has been made

This is an example of how to use the journal correction screen. If you find yourself in the situation where an invoice becomes overpaid, you will see an error on the customer/supplier allocation screen. In this example, there's an invoice reference "PI-" which has had a sum total of 431.75 marked against it, which is 0.50 more than the original. This may occur from previous corrections.

There is an extra row in the journal correction screen to allow you to add a row to mark the excess as "payment on account".

The original Purchase Invoice of £431.25:

The correct Purchase Payment would have two rows for clearing one invoice:

Say that you find that when you're doing your bank reconciliation you find that 431.75 has been taken from your bank account. You'll need to make a correction. If the actual amount received was 431.75 not 431.25, you would need to add in the extra as follows - note the unique reference of "Accnt2" for the Payment on Account (0.50) - this will be used by Brightpearl to allocate future payments against the 0.50.

This leaves the original 431.25 to match against the invoice of 431.25, and leaves 0.50 on the supplier account. If you wanted to clear the 0.50, create a Quick credit for the supplier, and allocate it against the payment on account.

Brightpearl can connect directly to your PayPal account to retrieve all the information needed to keep your accounts up to date.

Setting up

1. You will need a PayPal Business or Premier Account
   
2. Request API details from PayPal using the instructions here: Obtaining API Credentials
3. Open your Brightpearl account, and in the Setup -> Payment options screen, enter your API details. Ensure that your PayPal bank account is set, as well as you PayPal email address.

Retrieving information

Once you have set up your Brightpearl system, refresh the page to see the new menu items.

1. Visit the Accounts -> PayPal transaction log screen
2. Click "Synchronise"

Any new transactions will be added to the account, and if the status of an existing transaction has changed, it will be updated.

For the first synchronisation, Brightpearl will collect all transactions since the start of your current financial year. For subsequent synchronisations, Brightpearl will check all transactions for the past 4 weeks.

The PayPal log screen

This screen shows all the PayPal transactions that affect your balance. Transactions that are not shown include uncleared eChecks, "on hold transactions", and uncleared payments.

The screen will instantly show payment from a customer, using PayPal IPN, where:

• The customer has paid for a shopping cart on your ecommerce website
• The customer has paid for an invoice using your web portal
• The customer has paid an amount on account using your web portal
• You have received other funds into your PayPal account (not via Brightpearl)
• You have issued a refund using your PayPal control panel

When you synchronise, Brightpearl will collect all other transactions that have not already been created as above.

You can search the list using a number of parameters at the top of the screen.

Creating accounts entries

Brightpearl will automatically create accounting entries (journals) for the following transactions:

• The customer has paid for an invoice using your web portal
• The customer has paid an amount on account using your web portal

If an order has been placed, then Brightpearl will not enter the journal until the order is posted to accounts.

For the two above situations, the entry created in Brightpearl is the total payment value, so you will need to enter a journal for the fee from the PayPal screen as below:

1. Synchronise your account
2. View the listing - you will see for these transactions there is a journal for the total (gross) amount but not for the fee, and a blue icon will show in the "Banked" column, indicating that the process is prt complete.
3. Tick the box by the fee, and click "Bank selected" at the top of the screen
4. A journal (bank payment) will be created from your PayPal account to reflect the fee.

For other transactions, ie where the synchronisation has picked up a transaction that has not already been part banked, you will need to tick the box by the "net" amount and click "Bank selected" as above. Brightpearl will create a pair of transactions, one for the total amount, and one for the fee.

Ensure that you select the correct code and tax class for the transactions, and if you have a mixed set of transactions then bank them in batches per code or tax class.

Setting up your first financial year

Your new, empty account will not have a Year end set - you will need to do this using the Accounts - Setup - Year end screen.

As long as a period has no transactions within, it can be deleted if you need to. Once you've entered transactions, that period cannot be removed.

Closing the financial year

Once you have entered all you need at the end of the year, then you can close the accounts. Usually your accountant will post some journals to account for depreciation, losses and so on, as well as any tax adjustments, before you close the year.

Of course your accountant should just log on and do this for you - there is no need to export information or send a backup! You can create a new financial year and can continue working in the new period whilst your accountant is preparing the previous year's final accounts.

They may wish to lock the accounts for that previous year before closing the period, which will prevent you from entering transactions into that period whilst they are working on it.

Locking accounts for edit

Any member of staff with accounts priviledges can lock a period for their exclusive access. You can use this to ensure that nobody enters data into your previous financial year, without actually closing the period. Visit Accounts - Setup - Year end and choose to lock the accounts.

The Year End journal

When you click "close period", Brightpearl will post your Year end journal automatically for you to clear down the balances ready for the next period.

All the balances on the Sales and Purchase accounts are summed, to give your profit, which is transferred onto your profit account. Your asset balances are not affected. The year end journal is type "YE", and will not be included on a P&L or Balance sheet report of you are viewing those reports for a previous year. Note that you need to view reports for a previous year from the Year End screen.

What do I need to do for Year end?

There are a number of things that will ensure that your year end profit and balances are correct:

• Reconcile all your bank accounts
• Do a stock take on the last day of the year and make sure that Brightpearl is up to date

You can assign any transaction to a project, to get a full breakdown of costs and income on a project. This is available on all Pay plans that include accounting.

Adding a new Project

If you are not using the full Project management module (which includes time billing and other features) then you reach the Project list via Accounts : Setup : Projects.

Click the "add new project" button at the top right of the screen to create a new project. Only active, open projects appear in drop down menus when you are creating new entries such as sales, bank payments, wage journals etc.

Project profit and loss

1. Open up the standard Profit and Loss report
2. Click "advanced options"
3. Choose a Project

Project costs and revenue

The project list screen will give you an overview of total quoted cost (both Sales and Purchases), against what you have actually invoiced for. Note that the figures shown are Gross, ie including Tax. For a full detailed breakdown of all the transactions assigned to a project, click the report centre icon from the project list.

Only Sales Invoices, Sales Credits and Bank receipts are included in the "invoiced" column, and Purchase Invoices, Purchase Credits and Bank payments are included in the "spent" column.

For a full "in-flight" overview of time spent, open jobs, projected profit etc, you'll need to be using the Project management module.

Splitting a single cost between multiple projects

You can enter a single transaction, and then use the corrections screen to spread the cost of this transaction across more than one project.

1. Create your transaction, in this case it was a Bank Payment for £1000 against Productive labour, that we want to assign to two projects.
2. Visit the journal correction screen using Tasks:Correction and enter the journal ID to change
3. Add a new row
4. Split the amounts according to your projects, as shown in the image below
5. Add a reason for the correction
6. Save changes

Note that we don't use the Journal screen since Journals (JJ) are not included in the Project List summary. If you wanted to use a Journal (Tasks:Create journal) and assign a project to each row, this data will be shown in the Project Profit and Loss report.

Please also read the Brightpearl Guide to Purchasing

There are two types of purchase invoice; one type for stock items, and one type for overheads such as rent. This is to allow Brightpearl to track the exact price that you are paying for your stock to provide accurate and fast profit reports.

Quick Invoice : Entering a Supplier Invoice for overheads or expenses

A purchase invoice for overheads should be entered using Accounts - Suppliers - Enter quick invoice.

If a purchase invoice for overheads contains more than one tax code you can enter extra rows by clicking the "add row" button.

You can set up a supplier to have a default tax code, which will be filled automatically into the tax code field when entering an invoice from that supplier. Open the supplier's contact details page and enter the default tax code in the financial info tab.

Note that the suppliers search box here will only find suppliers that are Primary Contacts.

1. Find the Purchase Order that relates to the invoice you are entering; use the PO ref or the suppliers company name in the orders quick search box or use Purchases->View Purchase Orders.
2. Open the Purchase Order and make sure that the list of items on the PO match the list of items on the Invoice.
   This is the point at which you will see if you have been over-invoiced or have not received items that perhaps you should have done.
3. If the PO needs amending to match the Invoice, amend it now.
4. Remove lines if required by entering zero quantity then clicking Save, or by moving them to a new Purchase Order using the split to back order link.
5. Once the PO matches the invoice for both tax, net, shipping, save the order.
6. Click "receive invoice" at the top right of the screen.
7. Enter the invoice number, due date and invoice date and submit.
8. The invoice will now be showing on the suppliers aged report (Accounts->Suppliers->Supplier debt)

Note that if the invoice you receive from the supplier does not match the total you have on the Brightpearl system, there are two ways to make the correction. First, ensure that the quantities of items are the same on both the paper document and the Brightpearl Purchase Order, then save.

Method 1
You can amend the total and tax figures on the right hand side of the page and Brightpearl will allocate the difference since the last page save across all the products on the PO. If you do this, save the page before you change anything on the product listing section.

Method 2
Run through the products on the left hand side of the PO and make sure that each product price matches than on the Purchase Invoice received from your supplier. Brightpearl will automatically update the totals on the right hand side. If you are updating amounts in the products list, make sure that you save the order before amending any values on the right hand side.

Entering multi-code Purchase Invoices for stock

Some supplier invoices will contain items that you may want to allocate to different nominal codes; for example:

Since this invoice contains product (items that you are tracking the stock of), you must create a Purchase Order and then receive an invoice against the Purchase Order.

For the Import Duty line, you can add a "misc item" to the order, renaming it to "Duty" (or similar) and setting the nominal code to 5101 accordingly. In this way you can create an order that contains both products and non products.

This will post the total value of the invoice to the supplier account and split up the lines in the accounting database so that you can track spending more accurately.

Note that you have to have set "Allow multiple nominal codes in orders" to "yes" in your company settings screen.

Entering Supplier Invoices for Tax/VAT only

If you import goods from overseas, then you may well receive an invoice for Tax/VAT  only, with no goods or services. Follow these steps:

1. Click Accounts - Suppliers - Enter quick invoice from the main menu
2. Choose the supplier
3. Untick the "autocalculate" box
4. Add the total VAT into the Tax box
5. Add the total VAT into the Total box
6. Choose a purchase code (not the VAT liability code)
7. Submit the details.

Nominal code rules on Purchase orders

The Brightpearl system follows these rules when creating Sales and Purchase Orders:

1. As items are added to the Purchase Order they will be assigned the default nominal code of the supplier (if it exists)
2. If there is no supplier code, then the product nominal code is used. If the item is set to manage stock and you have Cost of Sales switched on, then the stock code (1000-1199 assets) will be used. If the item is not set to manage stock, or if you are not using Cost of Sales, then the product purchase code (5000-5999 purchases) is used.
3. If Brightpearl can't find a code for the product, it will be assigned to your default purchases code which is normally 5000 (Purchases).
4. If you save a nominal code per product once items have been added to the order, this setting will be kept.

An exception to this rule is drop-ship Purchase Orders, which upon saving force all product stock codes to their purchase code. If you've amended the Purchase code then this won't be overridden.

Stock value and stock control

Stock is valued at net cost price excluding tax. Stock purchases must be made through Brightpearl using a Purchase Order. When stock is received, the cost value from the Purchase Order is used to value the stock.Until the Supplier Invoice is received for the Purchase Order, this valuation is provisional.

When a Purchase Invoice is later received against the Purchase Order, the exact stock value is calculated and any items remaining in your database are updated. The cost value will also be saved into the database so that the next Purchase Order uses the most up to date cost values as the provisional amount.

For more information on stock control and Cost of Sales click here

Remember that Supplier Invoices for stock are entered against Purchase Orders, and Supplier Invoices for expenses (such as rent) are entered using Accounts->Suppliers->Enter quick invoice.

Month end stock take

Before you value your month end stock, you should make sure that the figures in Brightpearl reflect the quantities you actually have. Export the product database (Products->import/export) then make any corrections in the spreadsheet before re-importing the file.

Please read the documentation on Products to learn more about the product import/export process.

Click Accounts->Stock value from the main menu to see the current value of the product database. Click the "Record stock values" to keep a snapshot of the current database value at the end of the month to use later for entering opening and closing stock values.

Viewing and editing your stock values

To view the current levels of stock, and the price paid, click Products - Stock report from the main menu. You can search by warehouse, product name or SKU, and click "edit" to change the stock value.

Sending remittance advice

Receiving money from customers without an invoice

Sending or Printing Sales Invoices

Credit notes

You can either set up your accounts manually, or you can import data directly from your existing accounting software!

 Click here to read about importing your accounts

Read the "Introduction to Book keeping" section to learn about the Brightpearl Chart of Accounts and operating procedures.

Brightpearl supports the Flat Rate VAT scheme in the UK (FRV).

Setting up

To set your account up for Flat Rate (FRV), follow these steps:

1. Create an FRV adjustments account as a current liability using Accounts : Setup : Chart of accounts
   We recommend a sales code (4000 to 4999) if you are expecting to see a benefit from the scheme.
2. Go to Setup : Options : Finance
3. Choose Standard or Cash based as your VAT scheme
4. Select "yes" for flat rate VAT
5. Choose your business sector. The flat rate VAT percentage will be added for you.
6. If you're in your first year of Flat rate, you are eligible for a 1% discount. Enter your FRV effective date. The discount will be calculated at point of sales invoice.
7. Select your FRV adjustments code
8. Save changes

This will make sure that Brightpearl acts in the correct manner for Flat rate. For more details on the Flat Rate scheme, see the HMRC information.

Purchase Invoices

These are entered at Accounts : Suppliers : Quick invoice/credit

Purchase tax will be calculated as normal, but assigned to the expense (or purchase) account instead of the Purchase Tax Control account. This ensures that the tax on purchases does not appear on your VAT return.

Purchase Orders

FRV is not currently supported for receiving Purchase Invoices against Purchase Orders. Please raise a quick supplier invoice instead.

Sales Invoices

Sales invoices will be raised with net and tax figures showing for your customers in the usual way. it's only when the sale is invoiced that FRV adjustments are made to post the correct values into your accounts.

The Tax inclusive sale total is used to work out the tax payable, using your FRV rate (eg 7.5%). So if your sale is £100 + 17.5% VAT, then the taxable turnover is £117.50.

The FRV tax is 7.5% of £117.50, ie £8.81.

£8.81 is posted to your Sales tax control account, to appear on your VAT return, and an adjustment of £8.69 is posted to the FRV adjustment account to balance the entry, and also allow you to see the benefit of being on the FRV scheme. In this example the FRV adjustment account has been set to 4000.

The Sales invoice:

And the ledger entries created:

Quick sales invoices

FRV is not currently supported for quick sales invoices entered using Accounts : Customers : enter quick invoice (these menu items will not be available if FRV is turned on).

Non taxable income

Sometimes you'll want to enter income that's not to be included in your Flat rate turnover calculation, such as bank interest, and anything else that is not classed as "business supplies".

1. From the Accounts:Banking area, click to enter a Bank receipt.
2. Choose a bank account and a suitable account code.
3. Choose Not taxable from the tax drop down menu.
4. Enter the total amount.
5. Save

Taxable income

ALL taxable income should be entered as a Sales Invoice, and the payment allocated against it. Other income (such as bank interest, loans) do not constitute your "taxable turnover", and can be entered using a Bank receipt as above. You can also use the Enter Journal screen if you like.

VAT return

If your system is set to use Flat Rate Vat, then Brightpearl will use the Flat Rate VAT return screen. Procedure is the same as for non Flat rate scheme. More information is here.

Note that you will need to calculate the value of Box 2 manually since Brightpearl will allocate all Purchase Invoice tax to the FRV adjustment code. Using the advanced filters in the General Ledger report it's easy to find out the total net value of any EC purchases on T7 or T8 tax codes should you need to to.

For more information on VAT and filling out your return, please consult your accountant!

Cash based and Standard (revenue) based VAT

Brightpearl handles both Cash based and Standard based VAT accounting with the Flat Rate scheme. Choose your settings on the Setup:Options:Finance screen.

The choice of Standard or Cash based does not affect your day to day transactions, it only affects what is shown on the VAT return. Since Brightpearl uses transaction based VAT reconciliation (rather than period-based), changing between Cash based or Standard based VAT is easy to manage.

Cash based Flat Rate VAT

Brightpearl will include all transactions on the Sales Tax account for invoices that are completely paid in full, that have not been reconciled on a previous VAT return. Each Sales Tax entry will be at the Flat Rate active at the time, so this method will account for changes to the FRV rate in the middle of an accounting period. Note that if you part pay a Sales Invoice, the VAT component will not show until the invoice is cleared in full.

Standard (accrual/revenue) based Flat Rate VAT

Brightpearl will include all transactions on the Sales Tax account for the period selected, regardless of whether the invoice has been cleared. The only transactions that should be adding to the Sales Tax accounts are Sales Invoices, Sales Credits and manual Journal entries.

Reconciling your VAT return

When you are heppy with the numbers that display on your VAT return, print 2 copies then click the "reconcile VAT return" button. This will mark each transaction as reconciled, and create a journal to transfer the amount due from the Sales Tax account into the VAT liability account.

Paying your VAT

Simply create a Bank Payment from your bank account into the VAT liability account. If you are receiving money from HMRC, then create a Bank Receipt.

Use Brightpearl to produce your VAT returns. If you have entered information correctly for each sale, processed refunds correctly and entered invoices properly, then the VAT return is a simple operation:

• Set the VAT scheme you are using (Setup - Company from the main menu)
• Open the VAT return using Accounts - Reports - VAT Return from the main menu
• Select dates as shown on your paper VAT Return
• Choose whether to include reconciled transactions in the current period *
• Choose whether to include unreconciled transactions prior to the chosen period **
• Choose whether to display a detailed report
• Click Submit to show what you owe.
• Copy the numbers to your paper VAT Return
• Click "Reconcile VAT Return" to mark all the include transactions as reconciled for VAT. This means that they will not be included on a future VAT Return unless you specifically choose to "include current reconciled" when you run the VAT Return again.

It's a good idea to display and print a copy of the detailed report for your records before you reconcile the VAT transactions.

Standard (revenue/accrual based) VAT

For the Standard VAT scheme, the VAT Return displays relevant tax for all invoices on their invoice date, regardless of whether they have been paid or not. The totals are calculated from the transactions on the Sales Tax control account, and the Purchase Tax control acconut.

Cash based VAT

For Cash-based VAT scheme users, only Invoice transactions that have a payment allocated against them will be included. Brightpearl will pro-rata any part paid Sales and Purchase Invoices. Bank Payments and Bank Receipts with a tax component will be regarded as Cash transactions and will be included on the VAT return.

Reconciling the VAT return

Once a transaction has been reconciled for VAT you will not be able to change it. It is good practice to ensure that all Brightpearl bank records have been reconciled with the bank statements for the VAT period first to reduce the chance of errors. When you reconcile the VAT return, a journal will be created to transfer the VAT payable from your Sales/Purchase Tax accounts into your VAT liability account.

Paying the VAT

When you make a bank transfer to the Inland revenue, or write a cheque for the VAT amount, enter a Bank Payment to the VAT liability account. The balance of the VAT liability account should be the same amount as you are paying. To check the balance of the VAT liability account, view the Trial Balance.

If you are due to receive payment from the Inland Revenue, enter a Bank receipt instead.

Viewing previous VAT returns

You can view the transactions that have been included on previous returns by opening Accounts - Reports - VAT History from the main menu.

* Transactions that have already been reconciled for VAT using the VAT Return page. The normal setting for this option should be no.
** The normal setting for this option should be yes. This will include transactions with a date during any previous VAT period that have been entered into your accounts since the last VAT report was produced.

Before producing your VAT return you should enter all transactions into Brightpearl and reconcile all bank accounts up to the end date of the VAT period.

EC Sales list

Brightpearl will produce an automatic EC Sales list for the Inland revenue. Click Accounts - Reports - EC Sales list.