I recently set up a new client in SAGE. I am now running a P & L report for him but have found that around £3000 is showing up on the report as "Suspense and Mispostings" and is showing as being deducted from overheads.
When I go and look at the transaction history the amount is being calculated from the opening balances I entered on the bank account and on a couple of clients who had outstanding invoices.
So my questions are (for anyone kind enough to help!):
1. Why is this amount showing up under "overheads" in the first place?
2. How can I get rid of this amount in the suspense account while not messing up the P & L report?
Anything you enter via opening balances in the debtor or creditor ledgers (sales/purchase ledger balances) need an opposite entry so they default to the suspense account. When you enter your opening trial balance via journals you post the ledger balances to suspense and these journals contra with the opening balance entries
the suspense account is showing in the p&l because currently that's where your chart of accounts is set to put it. If you want it to show on the balance sheet then you need to move it by editing the COA - company, coa, overheads, delete suspense 9998, assets, insert a row, type a narrative for suspense, code 9998 to 9998, save. This will move suspense to the balance sheet - but if you've entered your opening tb correctly then you shouldn't have a suspense balance
Thanks for trying to explain (and for the tip about removing "suspense" from the P & L report). However, I'm still not sure what I should do now to move the amounts out of the suspense account. Where should these amounts properly go to?
You obviously entered the debtors' opening balances. When you do this using Sage's opening balance function you automatically create a debit posting in the Debtor's Control Account as well a credit entry in the Suspense Account. The same will happen when you post creditor's opening balances.
What you have not yet done is to post the general/nominal ledger balances from the trial balance onto Sage. When you do this and you come across your debtors' control account debit balance on the trial balance you should post this to the suspense account to contra the credit you created when posting the opening balances. You need to do the same with the creditors' control account balance, except of course crediting the suspense account.
To simplify, if you think of the trial balance as a journal you need to enter to show the opening general/nominal account balances, you should debit and credit whatever general/nominal account has a balance, excepting debtors' and creditors' control balances which you should post to the suspense account, thus clearing it.
It is soooo hard to write down what I mean so that you'll understand what to do !!
The upshot is that there are 2 seperate functions need to take place:
1. enter the individual customer/supplier opening balances in to the debtor and creditor ledgers via Edit Customer/Supplier - sounds as if you did that bit. The entries here are debit/credit correct ledger, credit/debit suspense - for every debit there must be a credit !! The suspense entry happens automatically
2. enter your full trial balance as a journal via Company, Journals and dated the last day of your previous period so that the entries roll forwards as opening balances. Every balance on the TB has to be entered on the journal to ensure it balances - this includes the total of customer/supplier balances - but rather than coding these 2 entries to 1100 or 2100 (debtors ledger/suppliers ledger) you code them to suspense - and this suspense entry will be the opposite of where the figure has defaulted to in my point 1.
I suspect you have thought that because you have entered the opening balances into the ledgers that this has done the debtor/creditor entries - but it hasn't. I would also suspect that when you entered the TB it didn't balance and you have changed your retained profit figure. In theory if you post a journal to suspense with the net of your trade debtors and trade creditors with the opposite entry to retained profit you will clear your suspense and make your balance sheet agree with the year end accounts.
Check that your entered TB agrees to the accounts. This will show you where the opposite error is if it's not retained profit
P.S. Having properly read through now I do understand where I have gone wrong. I have entered the opening balances only and as Tony says need to sort this out for the bank account as well. Thanks again everyone.
