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Post Info TOPIC: Sage line - prepayments and accruals


Veteran Member

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Sage line - prepayments and accruals


Hi everyone,

can anyone explain in detail about the prepayments and accruals in sage line 50, 2009? when we set up a prepayment, the entry acc to me is

Prepayment (1103) ac dr XXX (with the whole amount)
To Expense XXX.

When charged to that month, entry is

expense ac dr (months exp)
to prepayment


But, how can we know about the bank payments this way?How to trace the entries and know the payment is made?

I m using a sageline backup and i am trying to relate the prepayments. when i go to prepayment a/c, i can see a gross figure of all thats been charged. i can also see the different expenses making up to it. my concern is with the payment of this expense. i cant see them anywhere. how to trace this.

sorry,if i am not making much sense.i am quite new to sage. but, any resposne will be much appreciated


Regards,
Raj



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Raj


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Posts: 1329
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Can you say what exactly you are putting in prepayment please? You should only be using this account if you are carrying out a month/quarter/year end and you want to know the "real time" position of the company.

For the expense items you would usually either have the supplier (if goods bought on credit) set up as a supplier and the invoice would be entered using the supplier module and the invoice tab. Then when paid the payment would be carried out by using Bank and Supplier and reconciling.

If the expense item is a one off and paid for immediately you would simply use Bank and Payment.

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Veteran Member

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hi,

thanks for the reply.

there are items like telephone bill, vehicle insurance, buidling insurance, and a few more items. my issue is i cant see them being paid off, when i try to match the figures whilst looking at the bank option.

same doubt applies to accruals, i can see hp, gas, electric put under accruals. any suggestions?

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Raj


Guru

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Posts: 1329
Date:

You don't "match off" to prepayments. Let's take vehicle insurance. You pay for 12 months in January say 600. You post the invoice to the supplier account (broker or ins company) using nominal code for vehicle insurance and you "match" the bank payment to this through bank/supplier.

You use the prepayment account to spread the 600 over the 12 months in equal payments per month between prepayment account and nominal account. IE 50 per month.

Also be aware that it is the NET amount that is posted to both prepayment and nominal account not the GROSS.

Same with accruals. The actual bills are posted to the supplier and "matched" though the payment using bank /supplier. Take electric - it is estimated that the amount is say 400 net per quarter (the billing period). So 100 per month is posted to the accrual account.

-- Edited by semsley on Tuesday 15th of June 2010 10:11:07 PM

__________________

Advice from beyond the grave!!!

E&OE



Veteran Member

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Posts: 33
Date:

thank you very much for your timely and valuable reply.

There is one more doubt with regard to accruals. one of my senior accountants told me about doing accruals without estimation. This is with regard to the receipt of invoice and making entries. he told me it avoids us to estimate and helps us to make correct entries. its something to do with the rolling backs of dates whilst posting. have you come across something like this before?

i will try to think from this angle and will come back to you for further help. I appreciate your help a lot and looking forwards to your forums.

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Raj
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