Can anyone tell me if payments on account in SAGE only affect the balance sheet ? I am trying to understand whether by posting a payment on account, and then some time later posting the related invoice, I am only affecting the P/L when the invoice is posted.
Hi Lorraine
Yes to the first question. When you post invoice impact is on both P&L and balance sheet.
Have a go in your practice data version. Or do a backup, makes notes of relevant balances before you key anything, have a try and check the balances again. You can then restore if you have one something incorrectly. (assuming you are using sage 50, rather than the cloudy stuff!)
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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
Yes, but my question is if you post a payment on account in SAGE does that affect the P&L? For example posting the payment to the suppliers account before an invoice has been received and posted in SAGE.
No. Forget the software in question, and just think about the transactions logically, in terms of the debits and credits. I'm assuming you're talking about a payment to a supplier here - but the same principle applies in reverse (ish... sales ledger rather than purchase ledger) if it's a customer paying you on account.
When you make a payment, you are normally crediting the bank account and debiting something else.
If it's a simple expense, such as buying some stamps, you would be debiting a nominal account that goes on the P&L.
If it's a payment to a supplier account on the purchase ledger, you the debit is to the purchase ledger account. And the purchase ledger account is a balance sheet item - so you are debiting the balance sheet.
That applies whether it's a payment against an invoice, or if it's a payment on account; in either case, you are debiting the purchase ledger, which is a line on the balance sheet.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
