I hope someone can help with this. But its one of those where the description will be vague and confusing. Sorry!
Each month when I pay myself a salary a do so using journals and creditting and debitting various codes (directors salaries/PAYE/Net wages). I can't recall the exact steps but can describe them if necessary.
Now I quite often make a mistake. No problem - I reverse the error by creating more journals as journal entries can't be deleted in Sage.
However, when I look at my charts of accounts, the initial error, even though corrected, is being summed to give an incorrect total. For example, my PAYE should be £1000. However, owing to errors £3000 has passed through the PAYE nominal code, errors that have subsequently being corrected. But £3000 shows on my COA. Is this correct or am I correcting my journals incorrectly?
Hi Kevin, its hard to know if its correct without knowing the numbers involved,
however journals for salaries are very straightforward, you should post the following:
Dr 7000 (gross wages) Dr 7006 (Ers NI) Cr 2220 (net wages) Cr 2210 (PAYE, EES and Ers NI)
This should balance, ie the debits should equal the credits.
Write the journals out manually/on excel for each month and then post to Sage. When wages and paye are paid you will make a bank payment to 2220 and 2210 respectively. effectively debiting 2220 and 2210 and crediting the bank. When these payments are made it should clear both net pay and paye, ie clearing out the unpaid creditors.
Perhaps you can print out all the activity for the nom codes and check to see if they agree with the manual journals you have written, if not it may be a good idea to journal the original ones completely out, ie reverse them and start again.
I started writing out a reply to dig deeper but then spotted something else more complicated and just plain wrong. Often when explaining something to others the obvious just hits you doesn't it :D
In fairness I do and maybe you should think about reconciling the balance sheet monthly avoiding unnecessary complications further down the line. As Rob says all your wages liabilities should balance out.
