Hi I hope someone can help I've made a right mess. Using sage, entering wages journals and bank payments.
I've made a massive mistake somewhere, and somehow put a wages figure in twice somewhere. I think what i have done is made the journal below and then when the wages had been paid from the bank entered them in to net wages again.
If this is what I have done, then how to I enter the wages figure that has been paid out of the bank? CR bank and then DR????
Week 1
Net pay 1,933.39
PAYE 92.20
Employee NIC 79.02
Employer NIC 90.88
I have entered it as:
DR 7000 Gross wages
DR 7006 ER's NI
CR 2210 PAYE/NI
CR 2220 Net wages
Then when I have done the bank rec I have
CR Bank account
DR 7004 wages -regular with the net pay.
What a mess, very grateful to anyone that can help.
P.S. I don't do the payroll - another software is used for that.
Hi Rachel not a big mess honestly, you've just used the wrong 'net' nominal code. Instead of the p and L net wages 7004 you need to use Bal Sheet net 2220, which is where you accrued it when you ear-marked the liability.
For ease there are two wages to make your life simpler
1) get whoever is running the payroll to run a report of all entires with nominals (this can be set up in most payroll software, certainly the ones I'm aware of ie sage, 12pay and Moneysoft). Or
2) stick a little card in your drawer showing how the entries must look each time ( my favourite for when I get stuck when learning something new)
Note the gross wages nominal you have used at 7000 could be interchange with eg 7002 For Directors with 7003 for the rest of the staff. Also you can split out the PAYE and NI at the accrual stage...depends how much reporting is required for each. Here is what I do:-
When wages are calculated:-
Gross wages 7000 dr
Net wages 2220 cr
PAYE 2210 cr
NI (ee and er) 2211 credit
Employers NI 7006 dr
Then when wages are paid:-
Cr bank
Dr net wages 2220
When HMRC is paid:-
Cr bank
Dr PAYE 2210
Dr NI 2211
So each time you pay wages if they are monthly you will have a zero balance in 2220. If they PAYE on time you will have zeros in 2210/2211 as well although I only see that in about 2/3rds of my clients, cos the other lot delay in paying HMRC or they are on weekly wages. The total wages paid then show in the expense accounts.
So to correct yours...cr 7004 and and dr 2220
Check for any other lurking entries in the nominals, maybe try it on excel first if you're still unsure, but whatever you do back up sage before you start keying any adjustments (always my mantra anyway).
HTH
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thank you very much for this Joanne, this was really helpful and much appreciated.
Just a few other question about the journals for payroll. How on earth to I enter the NIC employment allowance?
I am putting all the ER's NI into 7006, and when I credit this with the NIC employment allowance - what is on the debit side of the journal?
They have been a few 'casual wages' which i have only entered as bank payments from the bank to 7005 Wages - Casual. Do I need to put these anywhere else?
Thank you very much for this Joanne, this was really helpful and much appreciated.
Just a few other question about the journals for payroll. How on earth to I enter the NIC employment allowance?
I am putting all the ER's NI into 7006, and when I credit this with the NIC employment allowance - what is on the debit side of the journal?
They have been a few 'casual wages' which i have only entered as bank payments from the bank to 7005 Wages - Casual. Do I need to put these anywhere else?
Thanks in advance to anyone that can help
Rachel
Hi Rachel
no problemo! Peasie has answered part so I will focus on the other. There is no such thing as casual wages any more. (My understanding anyhow, especially as you run a payroll, then everyone needs adding even if you have to take them off a week or two later). So my answer - run it through and process in the same way with your journals although you can use 7005 instead of eg gross wages 7000, but just so you can see the difference in costs between the other staff. I suspect though that these havent been put through PAYE/RTI - think you might need to have a 'word'
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
