Sage 50 Accounts - Transaction Meltdown! - The Book-keepers Forum (UK)

djzolla · Veteran Member

Sage 50 Accounts - Transaction Meltdown!

Wella · Expert

Hi Paul

You could do the following, (I am assuming no VAT to deal with). It assumes you are accepting the refund as it stands.

		Dr	Cr

Trans 1	Supplier account	£ 86.62
	Bank (or card etc)		£ 86.62
	Will leave a debit balance on account

Trans 2	Advertising (or other nominal account)	£ 75.00
	Supplier account		£ 75.00
	Will leave a 11.62 debit balance

Trans 3	Bank (or card etc)	£ 15.00
	Supplier		£ 15.00
	Will leave a 3.38 credit balance

Trans 4	Advertising (or other nominal account)	£ 3.38
	Supplier		£ 3.38

Put appropriate notes in the details box. You could short cut this but if you are confused, these are the logical steps.

You could also leave out the last part, which will leave a credit balance on the supplier account, if you felt that peopleperhour will be asking for 3.38 at a later date.

Note that there are other ways to do this but these are the steps that have taken place.

HTH
Bill

djzolla · Veteran Member

sorry been off for a while. Thanks for the reply and your help will be looking at it tomorrow:)

Forgot to mention there is VAT involved with the £75 amount

-- Edited by djzolla on Saturday 11th of December 2010 09:22:27 AM

djzolla · Veteran Member

No sorry i am still lost

I am very new to Sage amd am confused on where you are doing all of this.

Do I Invoice the supplier account or is it payment on account?

Where are you doing the rest of the transactions in the journal.

Excuse my ignorance but i need a step by step if possible, detailing on where i need to go per transaction pretty please smile

Paul

GrahamG · Veteran Member

This is the way I would have done things:

Step 1:

Suppliers Module - Create Purchase Ledger account for Freelance Web Company

Step 2:

Bank Module - Make supplier payment to newly created supplier's account. This will be a payment of £86.62 and because we haven't yet allocated it against an invoice, Sage will treat this as a 'payment on account', which it is.

As far as the bookkeeping is concerned, the DR balance sitting on the Supplier's account is effectively a debtor or prepayment until the work's be charged for properly.

Step 3:

Suppliers Module - Post the £75 invoice you received to the Freelance Web Company onto their purchase ledger account. If this figure includes VAT then it will be £63.83 to your P&L code (say advertising for the sake of argument) and VAT of £11.17. This has dealt with the P&L end of things and accounting for the VAT as well.

Step 4:

Bank Module - Supplier Payment (don't worry you are not going to pay them again, we are just using this option to allocate the previous payment.

When you enter the supplier code, the two transactions you will see are the initial payment on account and the £75 invoice that we've just posted.

Click on the £75 invoice line and click the "Pay In Full" button. Click on the unallocated payment and click the "Pay In Full" button. With any luck that should an unallocated balance of "£11.62". This will be still owed to you by Freelance Web company.

Step 5:

Supplier Module / Bank - Post the £15 as a refund from supplier to the Supplier's purchase ledger account (£15 goes back to the bank, and £15 credits the purchase ledger account).

Step 6:

Repeat the process mentioned in Step 4 to allocated the two remaining amounts.

You will finally be left with with a CR balance of £3.38 on the purchase ledger account.

Step 7:

Supplier Module - Post a credit note to the Freelance Web supplier's account for £3.38 (no VAT involved). The expenditure code used for the credit note posting will be the same nominal code you used to code the £75 invoice (say, advertising). The effect of this will be to reduce the expenditure on (say) advertising, which is what's happened.

Step 8:

Bank Module - Finally, call up the supplier account again and allocate the remaining unallocated items on the supplier's purchase ledger account. Now you are done and the bookkeeping is all tidy.

Longwinded - but this is the bookkeeping involved.

Cheers,
GrahamG

-- Edited by GrahamG on Wednesday 15th of December 2010 08:27:10 AM

djzolla · Veteran Member

Hi Graham

Thanks for taking the time out to give me a step by step guide. I will give it a shot and let you know how i got on:)

Once again thank you very much

Paul

djzolla · Veteran Member

Hi there

Ok i got to step 4 no problem. I then clicked on the invoice line of £75 and clicked pay in full. This added the £75 to the already 86.62 on account to give me a bank balance of -161.62!

I cannot find an area that says unallocated amount so I can Pay in Full option.

Am i missing something?

If i do not Pay in Full with the invoice of £75 the balace on the acocunt is showing 11.62 already. Can i not just leave this and then put the refund in?

Paul

-- Edited by djzolla on Saturday 18th of December 2010 02:19:38 PM

GrahamG · Veteran Member

Hi Paul,

No problems.

Let me just have a quick think about what you said and I'll post again later this evening.

Cheers,
Graham

bookkeepertim · Member

Hi Paul,

This is a nightmare in bookkeeping terms, because the amount paid does not equal the value on the underlying invoice, and you have to take care to get the VAT right. Therefore, I would look to simplify the processing.

Enter onto Sage the supplier invoice details to reflect the amount you have actually paid for the service (IE £70 inc. VAT for the subcontractor plus £1.62 in card charges) and then match the deposit and the refund to it.

It doesnt really matter that the invoice that supports the transaction is for £5 more. You will have processed the correct expense and the correct VAT, so HMRC will be happy.

I am no Sage expect, but it should simplify things a bit..

Best

-- Edited by bookkeepertim on Saturday 18th of December 2010 06:01:50 PM

Stardoe · Guru

I would do the same as GrahamG except when it comes to Step 4, you click on "Pay in Full" against the invoice and then tab to the payment on account line and enter £75.00, then click on Save. This will then leave the DR £11.62 on the account.

You then go to the Supplier refund option and enter the Supplier and £15 for the refund and Save. This leaves the £3.38 outstanding on the account, which you can then do a dummy credit for as Graham said, making sure you account for the VAT element.

You then need to net all these off against each other. The balance on the account will read zero but you need to tidy it up otherwise these will all show as outstanding transactions in the Supplier activity. Go to Bank - Supplier and Pay in Full against each transaction so that the analysis total is zero.

HTH and hasn't made you more confused!

Pauline

djzolla · Veteran Member

HI Stardoe

I totally understand what you have said. When i try and do this it comes up with the following message for some strange reason:

'There is a mismatch in the net/tax elements of the payments selected. Please ensure that the tax codes of any credit notes/payments on account are matched against any invoices which they are to be allocated to.'

Basically when I invoiced the supplier account I had a T1 VAT code against it. When I did the payment on account I used the T9 code as there is no VAT against the payment on account I think. When I ran through the exact process stipulated above from Graham and yourself in the practice area of Sage it had no problems. When I do it live it throws up that error message.

Any ideas would be appreciated from all:)

Thanks in advance

Paul

Stardoe · Guru

Hi Paul,

This message means you are on cash accounting for VAT then

As you allocate a payment against an invoice the tax codes must match. You need to go into Maintenance - Corrections, find the payment on account and change the Tax Code to T1 to match the invoice/credit note. When you have done this you will be able to pay them off against each other. Basically they all need to be the same tax code to do this even if there is no tax involved. You can change the code back after paying them off.

It worked in the practice data as this was probably set to Standard cash accounting where the tax is recorded on entering the invoices and not the payments/receipts.

And yes, ok, I know I should be out at some New Year's Eve party somewhere....I'm a saddo, what can I say! lol

HAPPY NEW YEAR everybody!!

Pauline

Wella · Expert

Stardoe wrote:
.......And yes, ok, I know I should be out at some New Year's Eve party somewhere....I'm a saddo, what can I say! lol

HAPPY NEW YEAR everybody!!

Pauline

You are not the only one Pauline, I'm even working today !!!

A real life Billy no mates LOL

Bill(y no mates)

Stardoe · Guru

Hi Bill,

Happy New Year to you. Yes, same here, I worked Tues through to Friday last week and will be doing some today as well! Guess that's the trouble being self-employed, if you don't work you don't get paid and someone has to do it I guess

Going to definitely have tomorrow off though!

Pauline (got mates, but don't see them very often!)

djzolla · Veteran Member

Hey Pauline

Thanks for the response I shall give it a whirl as soon as I can. Happy new year mate. 2011 should be interesting to say the least.

Paul

djzolla · Veteran Member

OMG!

Ater many a swaet bead i think i finally got there. Thank you all for your input you have been a great help.

Paul