I'm no Sage expert and other people may disagree with me on this one but to me from the useage it sounds as though it's materials used in the business. (I assume that there is no value associated with the waste material).
To me this could either be 5000 Materials purchased or a new code in the 5000 range specific to this item (maybe 5004 if you've not already used it).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Yes I agree with Shaun it looks to be a consumable item so should be shown in cost of sales section of the accounts. The sage codes for this are usually in the 5000s as Shaun said but check your chart of accounts and remember that when adding new codes they must be incorporated into the chart of accounts or your accounts won't balance.
If the business is purely a photo studio then yes it would be better suited in the 5000 range as it is a required cost as part of the trade and without it the job could not be completed properly, therefore I would class it as a cost of sale.
Oh dear, I'd disagree on this one as I would put in the 6000 range which is production costs. I personally would use the 5000 range for purchases which are used to re-sell.
-- Edited by semsley on Thursday 31st of March 2011 10:19:08 PM
I'm not defending my choice of code as, as mentioned in my post, I'm no SAGE expert. But, I think that this needs a little further discussion as whilst I can see the logic of incorporating the expense in with production labour costs in this instance isn't the item in question a production cost not dissimmilar in many ways to packaging materials (5003) or even materials used in the production of (5000).
As this seems to be a cost which I'm guessing is material to the business I think that it warrants it's own code and as it seems too regular to make it a 6900 based cost which is why I suggested 5004.
I know that you know a lot more about Sage than myself and usually I wouldn't think to argue a Sage point with yourselves but in this instance the item in question is a disposable material used in the production of the finished product so to me that still sounds like 5000 range.
As mentioned previously quite happy to be told that I'm wrong on this as that's the only way I'm ever going to move from being a casual Sage user to actually liking the product (still can't see that happening any time soon).
Hope that your both having a good day.
Talk later,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Not sure what to do now. Without these colorama paper backgrounds is impossible to do a photoshoot and photographers wont use the studio if we dont provide them. Because is only paper after one session it can't be used anymore. Need more help please.
Whichever you choose, be consistent and always post it to the same nominal code. On this way even if you chose the wrong code it will be easy to correct the mistake (if any) by the accountant or by you.
I have to fall into the Sheila/ Lynda camp, as I see the 5000 range as a range that is for purchases (or expenses directly involved in the aquisition of purchases), ie items bought for resale.
The 6000 range, is the direct cost range, and I see the paper as a consumable item that does not form part of a resaleable purchase but is a direct cost of the service supplied. Similar to direct labour, which in itself is not resaleable but is a direct cost of a service, or product.
Using the wrong code will not affect the overall figure but using 5xxx, will overstate the cost of purchases when a P&L is produced.
