Spreading Costs in Sage?
Discussion
There is a facility in Sage called "Recurring Entries" which you will find details on how to process if you use the "Help" facility.
Are you talking about dividing up accountancy fees, for instance, over a twelve month period?
What I would do is post the Accountancy Fee invoice to a Balance Sheet Nominal Ledger heading called "Prepayments". Then, set up a recurring journal entry to transfer, each month, one twelveth of the total accountancy invoice to "Accountancy Fees" in the Profit and Loss account.
Are you talking about dividing up accountancy fees, for instance, over a twelve month period?
What I would do is post the Accountancy Fee invoice to a Balance Sheet Nominal Ledger heading called "Prepayments". Then, set up a recurring journal entry to transfer, each month, one twelveth of the total accountancy invoice to "Accountancy Fees" in the Profit and Loss account.
I have a basic rule of thumb regarding using financial software - if you have a dedicated accounting, book-keeping or oayroll package, you will probably find that there is a technique available in each package to enable you to perform whatever action you want to do - without having to resort to a spreadsheet package like Excel. I am a great fan of Excel and use it a lot. However, too many people use it when they don't really need to and end up duplicating work. This is, of course, wasteful of time and resources and also increases the risk of errors creeping into your workings.
My motto - only use Excel whn there is positively, definitely no other alternative.
My motto - only use Excel whn there is positively, definitely no other alternative.
Eric, one more question if I may.
I still need to do P+L by hand because we do 'sales' in a particular month, but get the money from those sales, as one payment, in a later month. Coupled with the direct costs from those sales being invoiced at a different date as well, it makes the P+L completely wrong unless I take the figures into Excel and reposition the payments into different months.
Year end is nigh and I will make some changes once this happens.
When we receive self-billed invoices for the sales (one lump payment for a particular month's income), I will post them into a 'received revenue' ledger. Then I can manually post a journal from that ledger into the 'sales' ledger at the earlier, correct date (say the last day of the month). Same goes for direct costs as well (advertising for example).
This should work, shouldn't it ?
I still need to do P+L by hand because we do 'sales' in a particular month, but get the money from those sales, as one payment, in a later month. Coupled with the direct costs from those sales being invoiced at a different date as well, it makes the P+L completely wrong unless I take the figures into Excel and reposition the payments into different months.
Year end is nigh and I will make some changes once this happens.
When we receive self-billed invoices for the sales (one lump payment for a particular month's income), I will post them into a 'received revenue' ledger. Then I can manually post a journal from that ledger into the 'sales' ledger at the earlier, correct date (say the last day of the month). Same goes for direct costs as well (advertising for example).
This should work, shouldn't it ?
Trying to give advice without knowing the exact circumsatances of a business is not ideal. However, I'll have a stab.
Sage works in the principle that Sales are recorded at the time the Sales Invoice is issued. If you raise an invoice on 25 October 2003, it is entered into your Sales Ledger Control Account and the Sales Nominal Ledger Account in the P & L account as at that date. The date the sales invoice is actually paid by the customer is not relevant for the "Sales" record (it is relevant, of course, for the cash and/or bank records).
You seem to indicate that you record sales ("do Sales" is the expression you used) independently on Excel and do not enter the Sales invoice details onto your Sage system until the Self Billed invoice arrives from your customer. Do you get paid by your customer at this juncture as well? In other words, are you delaying the entry of the Sales invoice onto Sage until the moment you get paid? This is strictly speaking incorrect unless you are operating the VAT Cash Accounting System. If you are, you do not need to do it this way anyway as Sage allows you to enter your sales details in the normal way for accounting purposes but it can calculate VAT on a cash basis if you set the right "toggle" switch.
Self Billing indicates that your business does not raise its own Sales Invoices but rather depends on your customer preparing the necessary paperwork instead. Am I correct in this assumption?
Sage works in the principle that Sales are recorded at the time the Sales Invoice is issued. If you raise an invoice on 25 October 2003, it is entered into your Sales Ledger Control Account and the Sales Nominal Ledger Account in the P & L account as at that date. The date the sales invoice is actually paid by the customer is not relevant for the "Sales" record (it is relevant, of course, for the cash and/or bank records).
You seem to indicate that you record sales ("do Sales" is the expression you used) independently on Excel and do not enter the Sales invoice details onto your Sage system until the Self Billed invoice arrives from your customer. Do you get paid by your customer at this juncture as well? In other words, are you delaying the entry of the Sales invoice onto Sage until the moment you get paid? This is strictly speaking incorrect unless you are operating the VAT Cash Accounting System. If you are, you do not need to do it this way anyway as Sage allows you to enter your sales details in the normal way for accounting purposes but it can calculate VAT on a cash basis if you set the right "toggle" switch.
Self Billing indicates that your business does not raise its own Sales Invoices but rather depends on your customer preparing the necessary paperwork instead. Am I correct in this assumption?
Eric, yes this is correct, we are paid by self billing. So we get the invoice and the payment one or two months after the actual 'sale' (where the customer pays the intermediary billing company) is made. We do not raise an invoice. The self-billed invoice is dated at or around the payment date, not the actual sales period.
So say we have July; sales made total £1200, of which £400 is paid during July; £400 is paid to us in August; £400 in September. I would like all 3 payments to appear in July's P+L but I'm not sure if this is going to be possible, without moving the actual date of payment and screwing up VAT etc - or will it work if I use a nominal account to move the payments manually at a later date ?
Thanks for your help
So say we have July; sales made total £1200, of which £400 is paid during July; £400 is paid to us in August; £400 in September. I would like all 3 payments to appear in July's P+L but I'm not sure if this is going to be possible, without moving the actual date of payment and screwing up VAT etc - or will it work if I use a nominal account to move the payments manually at a later date ?
Thanks for your help
If the "Sale" was made in July, it should be entered on Sage in July. The cash is entered as and when it arrives and is banked. Cash receipts are not "Sales" - unless you are a cash retailer of course. If you do not want to account for the VAT on the Sale until the Cash actually arrives (i.e Cash Accounting), use the Cash Accounting option in Sage. You will find the Cash Accounting option under "Settings" and "Company Preferences". Changing over to Cash Accounting can be tricky so proceed down this road with caution.
To be able to avail of VAT Cash Accounting, the business' VAT exclusive annual turnover must be less than £600,000. Otherwise, you should only ever account for VAT by reference to the date of the issue of Sales Invoices.
To be honest, you should be getting this type of advice from your existing accountant. That's what they're for, after all.
To be able to avail of VAT Cash Accounting, the business' VAT exclusive annual turnover must be less than £600,000. Otherwise, you should only ever account for VAT by reference to the date of the issue of Sales Invoices.
To be honest, you should be getting this type of advice from your existing accountant. That's what they're for, after all.
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