We have recently started a new business from 2 Jan 2012 and I am still in the process of learning bookkeeping. Someone will be doing the books but I wanted to keep abreast with how it will all be done.
If there were start up costs or purchase invoices dated say in oct 2011 and paid for in nov 2011 ie before 2 Jan how would they be handled/dated in sage.
Also there are 5 shareholders which include 2 directors so how would the money they paid into the business be accounted for (as start up capital) and additionally if any expenses were incurred by them and then reclaimed such as buying a laptop for the business how does sage handle this.
Any costs you have prior to the establishment of your business in Jan can be entered dated at the current date in Jan, their is no problem in doing this.
Start up costs paid in by the two directors can be posted to the directors account in the balance sheet and this will give you a credit balance that is owed to them, you can have two accounts one for each director and post accordingly, this is how you can keep track of the capital sum for each one of them.
Expenses can be done more than one way but my Favorite is to open purchase ledger accounts / supplier accounts for them and post all the expenses they have in there and then just pay them back the money by paying your suppliers, easy and straight forward hope this helps.
Thank you Alfred for your answers. Could I please clarify with you a couple of things:
I'm just a bit confused about the dates.When entering the date for the PI do I keep the current date or the date on the invoice? Then when making payment if we paid in the invoice back in Nov 2011 say, what does sage do about the date, does it date the payment as done in Jan?
Are the director's accounts the ones in the 1200 range? Also, how do I account for the remaining shareholders who have input capital into the business
One other thing I forgot to ask is if internal building work was carried out for the business (a shop) before trading started, what is the best code in sage to use for this
Sorry to bombard you with all these questions and thank you for taking the time out to answer them!
If you started your financial year in Jan and paid the supplier from the bank accounting you are using for your business now you can use the date in Jan to post the invoice and payment as this will keep your bank recs correct at the end Jan. And you would need to tell Sage what date the payment was made so as not to create any problems.
As you have 5 people that have contributed monies for business capital startup, it might be easier to just use the capital account in the 3000 nominal code and have a separate spreadsheet just outlining the details of the 5 individuals that have given money and keep track of the movements of the funds also, as it might be more long winded the original way I mentioned being so many people involved.
If you have building work that has been undertaken for your shop premises this can go under fixtures and fittings as part of your capital expenditure which you can claim an allowance for when doing your year end taxes, But only if this is major work.
