Basic advice: Sage accounts

jimmo

Good luck I really hope the bookkeeper can help you. The “garbage” thing was not meant to be an insult or unfair but the more I try to explain it the worst it seems to get.
When I did my training to become an Inspector of Taxes the first 3 months were spent virtually entirely on bookkeeping training and, to be realistic, that was an overview rather than learning to be proficient at bookkeeping. I think the biggest mistakes that experienced taxmen made were to look at tax rules instead of bookkeeping rules. As a business person I really guess that you cannot afford to take 3 months out to learn bookkeeping.
Bookkeeping is a strange discipline to most of us, even if we have been trained in it but if you get the basics wrong then the rest goes haywire.
As I‘ve said before, I am not familiar with your particular Sage package but, I personally believe that computer systems such as Sage and Simplex are hugely powerful tools in the right hands but they are tools to be used rather than masters to be followed. If you understand bookkeeping you can use Sage to take a lot of the drudgery out of your record keeping but if you don’t understand bookkeeping you are in extreme danger.
When you have your session with the bookkeeper you really have to let go of your own perception of reality and accept that you are entering a new world where the bookkeeper is the expert. Obviously the more questions you ask, the more you are likely to learn but there will be lots of areas where you will have to take direction from the bookkeeper on blind faith.
You really have to live with that, at least until you develop some knowledge in the field.

kbtunstall

Hi, this is a similar query to the thread I've just been reading. I'm a sole trader and work with Sage Version 14. I'd like to know how I record cash withdrawals that I make to myself. I have been recording them as Wages but it looks like I should have set up a new nominal code and put my drawings under the Capital and Reserves Account. I provide a secretarial service so my withdrawals are made from the profit I make.

Also, as I'm not VAT registered, do I record all my suppliers invoices using the T9 code. i.e. the VAT doesn't need to be recorded separately?

Thanks.

Treading_Water

You just need to record the withdrawals as dividends. As a sole trader you don't pay yourself wages as such - any profits at the end of the year are classed as income for tax purposes and your drawings will be offset against this. The situation would be slightly different if you were running a limited company.

Debt_Free_Chick

kbtunstall wrote: »

Hi, this is a similar query to the thread I've just been reading. I'm a sole trader and work with Sage Version 14. I'd like to know how I record cash withdrawals that I make to myself. I have been recording them as Wages but it looks like I should have set up a new nominal code and put my drawings under the Capital and Reserves Account. I provide a secretarial service so my withdrawals are made from the profit I make.

Also, as I'm not VAT registered, do I record all my suppliers invoices using the T9 code. i.e. the VAT doesn't need to be recorded separately?

Thanks.

Are you sure there isn't a nominal code for drawings already? Try 9000 - have a look at the nominal codes and post what it says here.

If 9000 is already called drawings then you just do a bank payment using NC 9000.

kbtunstall

Hi, Thanks for your help. Presume from your answer that I have been putting the cash withdrawals under the wrong code then? It looks like I will have to set a new code up for drawings as there is nothing under 9000. 9999 is currently the code for the suspense and misspostings. I tried Google and opinions seem to vary! Some have said to create a code for drawings using nominal code 3250. Just want to be sure that I put it in the right place otherwise I'll mess up my profit and loss account! Thanks Debt Free Chick your help is much appreciated.

hopon

I'd setup a code around 3100. Rename 3000 to Capital Account Bfwd, and setup another code at 3050 as Capital introduced.

As to the garbage comments it is unfortunately true that too many people seem to think that they can buy a copy of Sage and they have instantly become an accountant. The amount of clients records that we get which have been prepared by their supposedly excellent book-keepers which turn out to be a joke is bad enough without a complete novice doing it.

kbtunstall

Cheers hopon, that's really helpful. I've set up a new code for the drawings now. It looks like I've posted my purchase invoices wrongly too -the VAT has been allocated using the T1 code on each of my postings. (I've been used to inputting for a Limited Company but now I'm a Sole Trader it is all very different). Would you post all your purchase invoices using the T9 code instead?