Sage . . Help

Nickynoo

I've been thrown in the deep end at a new job, and just when I thought I had my head around Sage, the owner of the business has decided that anyone purchasing anything any amount requires a purchase order,

What acount would I create and which nominal code would be appropriate? (what would be the protocol?)

Also wages, an outside agency complete the payroll for the company and invoice us for the tax and NI liability, I intend t set this company up as a new supplier but which would be suitable nominal code?

Sorry if I appear to be asking very dumb questions, it's just my boss is not clear at all and I end up more confused than prior to speaking to him.

Thank for anyone who could advise/help

Nicky

Donna Curling

Hi Nicky
Re: payroll provider - you could set up the supplier as 7601 Audit and Accountancy fees.
Unfortunately the first question is a rather large question but I would set up suppliers individually and set a default to appropriate nominal code.
Donna

jenny3549

Hi Nicky,

Just to clarify from Donna's answer...

Make sure that it is only the service charge element of your payroll provider's invoice that you are charging to nom code 7601 (their fees). You mention that they invoice you for the tax and NI liability so this amount needs to be posted elsewhere.

You don't say how you account for the wages at the moment. I don't want to confuse you but you need to ensure that the total amount that ends up showing for Wages in the P&L is correct (ie total gross salaries plus employers NI). If you let me know how you currently work it I can give you more detail.

In terms of the suppliers - my advice would be to set up supplier accounts in the Purchase Ledger for all suppliers that you will use more than once, it really will keep things nice and straight forward. You can set up a miscellaneous account for one-offs but it does get a bit hard to keep track of if there are too many. There is nothing wrong with having loads of different suppliers on Sage.

Alternatively, if the boss insists on purchase orders being raised for everything (good idea) then the MISC supplier account is great for raising the POs. If they are one-off purchases then the chances are you won't have credit accounts with then. You could pay for these with company credit cards and then you don't have to worry about posting individual invoices to the MISC code, you would just post the details through the credit card account when the bill comes in every month - just make sure you select the correct nom. code for each entry.

You asked which nominal code would be most appropriate - don't forget, the choice of nominal code (whether posting an invoice or a bank payment) entirely depends on what the item is. Sage is great as it has loads of default codes for the most common things but you can add as many more as you like (or amend the existing ones) - just make sure that, if you do add ones in, they are included in the Chart of Accounts.

Hope that helps a little.

Nickynoo

Hi Jenny,

Yes very helpful thank you, I receive a bank transfer slip for the net amount from my boss, and a payroll analaysis from the provider , I have looked to see what the previous member of staff had done with this and they completed journal entries, would this be the only posting I need to make?

Thank you

Nicky

jenny3549 wrote: »

Hi Nicky,

Just to clarify from Donna's answer...

Make sure that it is only the service charge element of your payroll provider's invoice that you are charging to nom code 7601 (their fees). You mention that they invoice you for the tax and NI liability so this amount needs to be posted elsewhere.

You don't say how you account for the wages at the moment. I don't want to confuse you but you need to ensure that the total amount that ends up showing for Wages in the P&L is correct (ie total gross salaries plus employers NI). If you let me know how you currently work it I can give you more detail.

In terms of the suppliers - my advice would be to set up supplier accounts in the Purchase Ledger for all suppliers that you will use more than once, it really will keep things nice and straight forward. You can set up a miscellaneous account for one-offs but it does get a bit hard to keep track of if there are too many. There is nothing wrong with having loads of different suppliers on Sage.

Alternatively, if the boss insists on purchase orders being raised for everything (good idea) then the MISC supplier account is great for raising the POs. If they are one-off purchases then the chances are you won't have credit accounts with then. You could pay for these with company credit cards and then you don't have to worry about posting individual invoices to the MISC code, you would just post the details through the credit card account when the bill comes in every month - just make sure you select the correct nom. code for each entry.

You asked which nominal code would be most appropriate - don't forget, the choice of nominal code (whether posting an invoice or a bank payment) entirely depends on what the item is. Sage is great as it has loads of default codes for the most common things but you can add as many more as you like (or amend the existing ones) - just make sure that, if you do add ones in, they are included in the Chart of Accounts.

Hope that helps a little.

jenny3549

Hi Nicky,

Yep, you would just need journals:

From boss bank slip:
Cr Bank (net amount of wages)
Dr Wages Account (net amount of wages)

From payroll analysis:
Cr PAYE account (2210) (total of PAYE and NI deductions from employees plus employer's NI Liability)
Dr Wages account (same amount)

Then, when payment made to Inland Revenue (22nd of month) for liability:
Cr Bank
Dr PAYE account

This way your wages account records the full cost of the salaries for the P&L while the PAYE account records the liability to HMRC for the Balance Sheet until it is paid.

Obviously, without knowing your payroll I don't know if you would have any other journals (attachment of earnings, out of pocket expenses through the payroll, pension payments etc). The above is just the basics.

Have a look at the journals done for one month by your predecessor with the provider's analysis in front of you to see if you can follow the figures.

justathought

PO's

Maybe I am misunderstanding the question but you don't need to open a separate account for purchase orders. They are document you send to notify suppliers what you want to buy and are not part of the double entry bookkeeping system. When producing one the account name of a supplier goes in the account box, or you have to create a new supplier.

Hope this helps and does not confuse.

Nickynoo

Hi Jenny,

I have managed to make the required journal entries, just one last thing I promise (for now anyway) how do I print out the journals?

Thank you

Nicky

jenny3549 wrote: »

Hi Nicky,

Yep, you would just need journals:

From boss bank slip:
Cr Bank (net amount of wages)
Dr Wages Account (net amount of wages)

From payroll analysis:
Cr PAYE account (2210) (total of PAYE and NI deductions from employees plus employer's NI Liability)
Dr Wages account (same amount)

Then, when payment made to Inland Revenue (22nd of month) for liability:
Cr Bank
Dr PAYE account

This way your wages account records the full cost of the salaries for the P&L while the PAYE account records the liability to HMRC for the Balance Sheet until it is paid.

Obviously, without knowing your payroll I don't know if you would have any other journals (attachment of earnings, out of pocket expenses through the payroll, pension payments etc). The above is just the basics.

Have a look at the journals done for one month by your predecessor with the provider's analysis in front of you to see if you can follow the figures.

jenny3549

Hi Nicky,

You have a couple of choices if you want to keep a paper record of what you have entered (Sage will have the record in the nominal activity for each code).

Either:

Click on print list on the journal entry window before you click save to print out the journals that you are entering.

Or:

Highlight the nominal codes that you have done journals for on the nominal ledger list and then go to reports, select nominal activity and enter the date in which you processed the journals and the report will run for the codes you selected showing those journals .

There may be a better way that I'm not aware of as I never print journals but either of those two should be fine.