I am so struggling and really need your help. I just started working as a bookkeeper and there is no one in the company who could give me any advice. The company is 1 year old and they have never done their accounts yet.
I have two receipts that are from November 2010 when VAT was 17.5%. They were included in expense claim this month. The companys financial year starts 1 April and I use Cash Accounting. Could you please help me and explain how to record this entry on Sage as I just started working with Sage and have got no clue.
In addition, is T9 always used in journals? Or does it depend on the Tax code, e.g . T1 for standard rated transactions, T2exempt transactions, etc?
Moreover, the companys supplier owed the commission on sales of £5000 for a previous financial year (1 Jan 2010 31 March 2010). The invoice was raised but the customer/supplier has never made a payment. As our company owed the £13000 for the purchases to the supplier they mutually agreed that the balance of £5000 was cleared and we had to pay £8000 only. I am so confused. Physically the money has never reached the accounts, how can show the payments on sage?
I entered the invoice to the customer account in sage and post this to the commission nominal. Do I have Dr Commission, Cr Accruals in journals and then Dr Accruals, Cr commission on the date they decided to clear the balance? And what about the receipts? How to allocate the suppliers invoices against £5000? As I mentioned before I use Cash Accounting is it still correct to use accruals and prepayments on the journals?
For some of you my questions might sound silly as I see here are highly qualified and experienced bookkeepers but I just started and really need your help. Any advice is appreciated, please, help me!!!!
The expenses should be recorded using the rate and amount of VAT on the receipt i.e. at 17.5%. I normally set employees up as suppliers, post on the expense claim as a purchase invoice and then allocate a supplier payment against the invoice when its paid from the bank.
Journals can be any tax code and depend on the transaction in question.
On Sage there is a contra function where you can offset supplier invoices against customer invoices and vica versa. Go to tools and then contra entries to account for the £5000.
Hope this helps.
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Stuart
Birmingham City FC - Blues is my religion St Andrews is my church
I was so scared as I thought that the tax codes i was using were incorrect. And thank you for your advise to set up employees as suppliers. Regarding contra entries I cant find them in tools, maybe Sage V17 does not support this function?
If you are using Sage Instant I don't think it has the contra funtion. I am using Instant V15 and that does not have it.
Just so that I understand the situation....do you have an invoice for £5000 on a customer account and £13000 on a supplier account at present? And the plan is for you just to pay the supplier £8000?
If this is the case, then when you actually physically pay the £8000 to the supplier you just need to go into Bank - Supplier and pay in full the £13000 and then go into Bank - Customer and pay in full the £5000. The net effect on your bank reconciliation will be the £8000, i.e. there won't be an actual transaction showing as £8000 but if you mark the payment of £13000 and the receipt of £5000 as reconciled, the net effect will be a payment of £8000 and the net effect on the VAT will be the same.
You do not need to do anything with accruals/prepayments or journals as the amount outstanding from the previous year is simply a liability owing from the previous year, nothing has actually been paid.
I forgot to mention that the suppliers invoice of £13000 was also raised in previous fin year,February 2010 and I do not have it on sage as the company started using sage only from 1 April 2011, current fin year. When I try to post the suppliers invoice it says that the date is outside current fin year... Can I ask suppliers' to credit this invoice and date it as of 1 April 2011 or do I have to post it as a short term liability (N/C 2100)?
If this is the Company's second year of trading....are you waiting for the accountants to do the accounts for the first year? If so, this invoice should be included in that year's accounts and should be entered into Sage as an opening balance dated 1 April. I think you should speak to your accountants and ask them if they will have an opening Trial Balance for you to input when they have done the accounts.
Thank you Pauline for you reply. Yes, it is a second year. The problem is that my directors do not want to pay extra money for an accountant and they decided to do accounts by themselves. Second problem-they have no idea what the accounting is. I am an accounting student and i have no experience at all, I have a very good tutor who usually advice me but he is on the holiday at the moment. In addition the company has not prepared their accounts yet so I do not know what the trial balance is.... I was always expecting that when I start working i will always have a training or at least some one who could answer my questions. Unfortunately I have so many questions but there is no one to answer them :) .....
As a Limited Company I would impress upon them that it is almost essential to have an accountant. If they are trying to do the accounts themselves and don't know what they are doing they could very soon get into trouble. Wouldn't be so bad if the company was a sole trader.
While you are waiting for some help or an opening trial balance I would enter this £13000 invoice in the relevant supplier account with the date of the first day of your new financial year.
Don't be disheartened, we all have to start somewhere and in my opinion there is no better way of learning than actually doing the job There is always the help on here as well
