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Double entry for posting invoices on sage?

What's the double entry for Posting invoices on sage

Every purchase transaction that we post on sage, how does it all add up on p&l or balance sheet? 

Thank you 

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23rd Oct 2017 17:43

Bless me !! That's a big question.

Could you narrow down your problem with a few more sentences ?

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to lionofludesch
23rd Oct 2017 22:00

Thanks for your reply.
For eg.,
Let’s say we post water bill on Yorkshire water purchase ledger supplier account:
Nominal 2121, cost centre 240, amount £1000.
It gets paid on a regular bacs payment run.

How would the above effect the p&l and balance sheet?

Hopefully the above makes sense.

Thanks

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to julyaugust
23rd Oct 2017 22:06

When the invoice is posted
Dr Nominal 2121, cost centre 240, amount £1,000.
Cr Creditors Yorkshire water purchase ledger supplier account £1,000

I assume Nominal 2121 is a P & L code so it will now have a debit balance of £1,000 that will reduce profit for that amount. This debit will be balanced with a creditor of £1,000 which is the Yorkshire Water account.

When you pay it the entry will be

Dr Creditors Yorkshire water purchase ledger supplier account £1,000
Cr Bank £1,000.

So your Trial Balance will have a debit balance of £1,000 on Nominal 2121 and a credit balance of £1,000 on bank.

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23rd Oct 2017 19:51

When you post a purchase invoice you allocate it to a ledger code. Sage looks at the ledger code and uses that to decide if it is a P & L item or for the Balance Sheet.

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23rd Oct 2017 20:11

It's a debit to the cost code (usually, but not always, a profit and loss item) and a credit to trade creditors in the balance sheet. Payment of the invoice is a debit to trade creditors and a credit to bank, also in the balance sheet.

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23rd Oct 2017 21:03

Sage does that for you.

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23rd Oct 2017 22:58

Try one transaction at a time in the practice maul then run a TB, activity report and even a vat return so you can see the various impacts.

It's pretty basic double entry stuff, tbh.

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26th Oct 2017 15:09

If you look at your chart of accounts it will show you which codes end up in which financial statement (P&L or balance sheet), and you can amend this information should you wish.
Water costs should be a Profit and Loss item. If you are producing monthly management accounts, the cost should be spread evenly across the months affected (via prepayments or accrual).
Sage has lots of helpful manuals on how to use it here https://my.sage.co.uk/public/help.aspx#/customer but I would maybe suggest a basic bookkeeping course to give you a better understanding of double entry.

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