Correct SL/PL Posting Procedure Sage 50

What is best posting procedure for Sage 50 Sales Ledger & Purchase Ledger Transactions

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I am being advised that the correct procedure for reconciling ledgers in Sage 50 is to do this via Bank Reconciliations.

We currently record receipts from customers as SA and Payments to PA but this means our aged debtors and aged creditors are never correct.

Our accountants state that as long as bank reconciles daily/weekly/monthly it doesnt matter about Aged Debtors or Aged Creditors balancing or being matched off

surely this cant be correct? I believe the process should be to record transactions correctly in ledgers (SI/SR) or (PI/PP) this way we are ensuring all transactions balance and match in ledgers before we even get to reconcile the bank.

Ledgers should be correct > Bank Reconciliation ran at end of process.

We are a construction company, and this has been an historic issue with our debtors and creditors reports never being correct with SA & PA recorded even when we do have invoices raised for customers or invoices sent by suppliers.

what should be correct procedure in Sage 50? does the 'just bank reconciliation' approach make accounting best practices sense?

Replies (6)

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By paulwakefield1
10th Apr 2024 08:06

Your accountants are right but you also have a point.

Recording the receipts as SA and PA will keep your accounts and bank reconciliations straight. Your sales ledger and purchase ledger totals will be correct although it is always worth checking that your debtor and creditor listings agree to the TB control accounts.

However if you do not post as PP or SR then you are building up something of a nightmare especially when a query comes along as you are not matching receipts and payments to specific invoices. And, as you say, the aged debtor and creditor reports will not be helpful. I would suggest that using PP and SR is still best practice even for a construction company where you probably have a lot of part payments and retentions.

In summary, accounts will be fine but debtor/creditor control is much more difficult with the current system.

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By paulhammett
10th Apr 2024 08:34

Matching receipts and payments to individual invoices is surely the right way to do things. Or is that old hat these days?

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Replying to paulhammett:
By rmillaree
10th Apr 2024 10:49

the problem here is probably due to construction vat (applications for payments)

The main sage issue is that if one is invoice basis and does applications for payments then you dont historically issue invoices in advance - you can though issue them to match payments.

I think yhou need to have another chat with acountant to go through the detail of their suggestion and discuss woraroudn options.

If they completely fob you off perhaps speak to another acountant for different opinion.

Note the detail very much does matter here so whatever you do ensure you dig into that fine detail - there is danger if your accountant knows score and you swap to less knowledegeable accountant that they might be more helpful but may not be as clued up on construction stuff - not all acountants know their sh t ref sage 50 and cis. pm if you need formal second opinion here. Note there is a chance your acountant is nolt clued up and is fobbing you off.

I am presuming you are vat registered

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By tom123
10th Apr 2024 10:41

Sounds like the external accountants are taking a broad brush view - which is probably correct for year end purposes - but I couldn't run a business like this.

Obviously all supplier payments and customer receipts need to be matched on a regular basis. How do you know what to pay or chase otherwise?

Very much not old hat in any organisations I work in.

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By cartergreen377
10th Apr 2024 13:54

Thanks for feedback, to clarify although we are a construction company using APP > PN > Invoice process, the issue I am having on Sales Ledger is that we are receiving payments from Customer into bank but have NO invoice recorded in Sage 50! but instead of finding out why invoices aren't being raised by our commercial or finance teams, we are simply fudging debtors & same for creditors to allow us to reconcile bank on a daily basis. This leads us to have debtor & creditor reports with negative balances (SA), even when we recorded invoices (SI) we then record as SA instead of SR, and most often we are not matching these off in Sage 50 so balances appear correct, but we have loads of outstanding transactions on debtors & creditors, surely this is bad accounting practice. In fairness to the Accountants it is our internal team working this way (concentrating on Bank Recs and not on Ledgers) I am trying to advise that Ledger transactions should be entered correctly and clean (i.e. SI/SR or PI/PP) if Sales Ledger and Purchase Ledgers are clean, Bank Recs should be a doddle.

we have massive discrepancies on Debtors due to so many SA's being recorded, does this impact integrity of our debtors control account?

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Replying to cartergreen377:
By rmillaree
10th Apr 2024 14:27

In fairness to the Accountants it is our internal team working this way (concentrating on Bank Recs and not on Ledgers) I am trying to advise that Ledger transactions should be entered correctly and clean (i.e. SI/SR or PI/PP) if Sales Ledger and Purchase Ledgers are clean, Bank Recs should be a doddle.

i cant understand why whoever is doing the fudging cant explain to you why it is like that - ultimately though is is surely someones reponsiblity for advising ref ledger balances - they should keep everyone else up to date as to why it "appears" to be the shambles it is if it is.

You might be fussing about nothing if its all sorted later and everyone else is happy other than you.

this might be a complete non issue or might be someone incompetent at their job - quizzing reponsible person will hopefully lead you down the path you need to go down top try and work that out.

its often too much hassle managing certain "stage payment" type stuff in sage - it might very will be annual check and adjust is fine and sorts. I would agree it doesnt sound far from ideal the situation if there is no checks and baalnces doen at time receipt is posted - particulary noiw cis vat can be more complex !

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