Your feedback on the matters below would be greatly appreciated:
1. What is the best way to post wages journals into Sage, and how do I deal with say a pay advance to an employee if I have shown it debitting the bank account as Net wages (2220) or if SSP payments have been made to an employee.
2. What is the best way to deal with any prepayments or accruals i.e. what values are we talking about that makes a single posting substantial enough to reflect it as a prepayment or accrual, and what is the best way of posting them on Sage?
Thanks
K
-- Edited by Kris1 on Saturday 23rd of January 2010 05:34:21 PM
Wages journal on sage, we use the following so it can give you an idea DR 6XXX wages DR 6XXX emplyers NI CR 2210 net wages CR 22XX PAYE & NI
This is a very simple example but I hope you get the idea. If you give an advance, then you are correct in posting it to 2210 as at the end of the month when you post the wages, it will correct itself, so long as you remember to deduct this advance from his pay.
Prepayments
again we use a 1XXX code of these and do a journal each month (as we do monthly managment accounts) to show these, ie DR 1XXX, CR the relevant code for expenses etc - but you always have to remember to reverse this journal at the begining of the next period.
Accruals
the same as the above, although we use a 2XXX code, and you will DR the expense and CR 2XXX.
Sage has these already set up.
I would always do the Prepay and Accruals no matter what the value, although if the business is not substantial, then if only a few punds, I would ignore, but generally rent, rates, telephone etc come into this category..
Maybve I'm being a bit dense, but when I do the journal, the credit side will be less than the debit won't it, as the pay advance will have been deducted off the net in the payroll report.
Do I just cr the pay advance back onto the net wages then?
When you make the payment advance, you will CR bank and DR net wages (2220). Then you would do the journal for the end of the month, but when you come to actually pay the net wages at the end of the month, you need to remember to deduct the advance from what you are actually paying, then they will balance. If you have a difference, I would suggest the advance has not been deducted from the payment made. The CR side of 2220 is what the net wages is for the month and what should be paid, not necessarily at the same time though. If the CR is less than the DR side on 2220, then you have paid too much net wages.
Thanks, yes that makes perfect sense now. I need to reflect the true figure of net wages paid not necassarily the final net pay at the end of the month on the payroll report.
Hi Seen this posting and i was wondering. I passed my Level 2 Comp with 98% i was near as possible sure that the 2% lose was around and to do with reversing a prepayment entry. What is the correct way of doing this?
Say Rent 1000 prepaid - what should i do?
Would i CR Bank A/c & DR Prepaid A/c Then would i CR Prepaid A/c and DR Rent A/c?
Or do i have to pay it back to the bank then to the rent a/c??????
Your case is a bit simpler, you are simply reversing a year end matching adjustment and are moving the amount out of the prepayment account (which would appear as an asset on the balance sheet for previous year) and moving it back as an expense, into the Rent a/c for the current year, so Dr Rent and CR Prepay
