I am new to the forum and currently transferring my business's accounts to Sage. I do have an accounting/bookkeeping background but have come across something that just doesn't seem to gel with me and would really appreciate a bit of advice.
Current software package includes a 'payroll holding account' where an entry is made once the monies leave the bank account (payroll done externally and salaries and deductions leave directly once a month).
Once timesheets are received the money is taken out of the payroll holding account and posted to the following accounts
Payroll expense net pay - debit
Payroll expense tax deducted - debit
Payroll expense employees NI - debit
Payroll expense employers NI - debit
There doesn't seem to be a gross pay entry, although I realise that it is there by virtue of the above.
By the time the entries are made the monies have been paid to all including HMRC.
Can anyone advise what codes you would use for the above items. I think I am struggling with the fact that the old package codes were 'expenses' whereas the 2 codes in Sage are liabilities and the liability has already been paid when the entries are made.
Your list there could be put into to accounts for expense so Gross pay - Debit (Net plus EESNIC plus PAYE) 7000 or thereabouts ERSNIC - Debit 7001 or thereabouts
The corresponding accounts would be as you say liability account in the Balance sheet
Net pay - Credit 2220 or thereabouts then either HMRC - Credit (NIC EES+ERS plus Paye) 2201 or thereabouts or PAYE - Credit 2201 or thereabouts NIC - Credit (EES + ERS) 2204 or thereabouts
Couldn't tell you the exact codes without starting up sage but they should be in the default layout.
Then you would pay from the bank account (credit) and debit the Net pay and HMRC/PAYE/NIC whichever you choose to use which in your case can be done before you actually post the wage expense to sage as the liabilty accounts should in a perfect world just balance to zero.
If using Sage payroll and accounts on same machine you could use the payroll nominal link and let machine do entries for you. Company / nominal settings. May take a little time finding the right path if multiple sage on computer but will automatically transfer. There are defaults you can use, they also may require tweeking to suit.
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
