Sage 50 Accounts: Setting up Prepayments and Accruals

Using Sage 50 Accounts 2016

Setting up Prepayments

To adjust statements and reports for any payments which have to be made in advance, for example rent or insurance, there is a Prepayments option available from the Nominal codes window. This allows for a payment to be shown as spread over the number of months it refers to, not just the month it was paid in.

After setting up a prepayment, when you run the Month End procedure the correct monthly figure is posted to the appropriate account. All you have to do is to remember to post a suitable payment for the full amount from the bank to the appropriate nominal account.

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Just click on the Wizard button to let the Prepayments Wizard guide you through setting up a prepayment:

 

 

 

Step 1
From the Nominal codes toolbar, click Prepayments to bring up the Prepayments window

Step 2
Enter the relevant nominal account code (N/C)

 

Step 3
Enter Details, Net Value of prepayment and the number of Months prepayment covers (maximum of 12)

 

Step 4
Note that the monthly rate is entered for you

 

Step 5
Click Save to accept the prepayment details

 

Step 6
Click Close to return to the Nominal codes window

 

 

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No accounting takes place when prepayment details are saved. Journal Entry postings are only made when the Month End, Post Prepayments option is run.

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Use the F6 key to save time and reduce errors when copying data from a previous entry.

 

 

 

Setting up Accruals

The Accruals option allows the accounts to be adjusted for any payments you make in one accounting period, which in fact relate to a previous period, such as a gas or electricity bill.

In this example, the transaction would be entered using the Accrual and Gas or Electricity accounts. When the charges actually fall due and the bill is paid, the payment transaction is applied to the Accrual account, not the Gas or Electricity account.

As with the prepayments option, the accruals are posted as part of your month end procedure using the Period End, Month End option. This procedure automatically updates the audit trail and nominal accounts records.

 

Step 1
From the Nominal codes window, click Accruals

Step 2
Enter Nominal account code, or use the Finder button

Step 3
Enter Details, the estimated total Net Value of accrual and number of Months for the accrual

Step 4
Monthly accrual is calculated for you

Step 5
Click Save to accept accrual details

Step 6
Click Close to return to the Nominal codes window

 

 

 

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The Posted column shows how many postings have been made  using the Month End Post prepayment option.

 

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No accounting takes place when accrual details are saved. Journal Entry postings are only made when the Month End, Post Accruals option is run.

 

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If you have already set up some accrual entries, these appear in the Accruals window when it opens. Just add your new Accrual at the end of the list.

 

 

 

 

Want to know more?

For the essential guide to Sage 50 Accounts 2016, click here. Updated for Sage 50 Accounts for the 2016/17 financial year, Sage 50 Accounts 2016 in easy steps uses detailed images and easy-to-follow instructions, showing you how to quickly get to grips with the new features of this leading accounts software.