If you check your chart of accounts (which you should find on the row of icons along the top of the nominal ledger screen), I suspect you'll find that it isn't 1001 that's appearing on your P&L, but the combined balances of 5200/5201 - which is how it should be; 1001 is the balance sheet figure, showing the amount of stock held at the end of the year (or month if you adjust it monthly), and 5200/5201 represent the fluctuations in that stock level.

So, I'd suggest the £216,453 that's appearing on your P&L isn't nominal code 1001 as you suggest, and is in fact the total of 5200/5201. (£241,540 on 5200 minus (£25,848 minus £762) on 5201).

However, based on what you've said, those figures clearly can't be correct - if they only spent £90,000 on stock items in the entire year - an average of £7500 per month - there's no way January is likely to have a £216,000 increase in stock!

My suspectometer at the moment is pointing at the figures you have as "accountants adj" - with which I have two possible issues.

My first issue is that they look like they might be the accountant's year end adjustments, having finalised the 2011 accounts. Their purpose is to adjust those nominal codes on Sage that appear on the balance sheet so that they match the finalised balance sheet. These are often referred to as "opening balance adjustments" which is why some accountants have the very annoying habit of posting them as the first day of the new financial year, rather than as the last day of the year they've closed. And this is what I'm thinking has happened here.

However, my second issue is that there are "accountants adj" transactions also posted to 5200 and 5201, which are P&L codes. Normally, those type of adjustments (if my assumption that they ARE the accountant's year end/opening balance adjustments is correct) should only be to nominal codes that appear on the balance sheet. This makes me wonder if the adjustments are NOT the year end/opening balance adjustments - but that then begs the question of what they actually are.

(Combining both issues, if they are to do with the accountant's year end/opening balance adjustments, and some of those adjustments are appearing in P&L codes, then have such adjustments been posted to any other P&L codes? It might be worth looking at the transaction numbers for those three and then finding them on the audit trail (Nominal Ledger -> Financials) to see the full list of adjustments.)

The bottom line, though, is that I think you need to speak to the accountant responsible to get to the bottom of this, because those adjustments strike me as being the source of your problem.

Hi Jane,

Can you tell me whats the closing stock on nominal code 1001 as at 1st Feb.

--------------------Yes - it's Db 762.43

On looking at the working below, it all looks fine to me.

Profit & Loss nominals for stock 5200 and 5201 doesn't show you the purchases in the month, instead it shows you how much of stock change has happened with respective to the previous month. In your case, it appears that closing stock is changed by £762 in comparision to December.

And the stock in the balance sheet nominal 1001 shows what the stock the company is holding as at 31st Jan.

----------------n/c 1001 balance at 1.2.2012 is NIL

If you want to see what the purchases made by the company in the month, then see the purchases nominal code 5000.

-----------------N/c 5000 has been used for purchase of second hand which doesn't count as stock as it's immediately send for melt down. (I understand).
-------------- they do have other purchase codes for items sold on the web. Stock is purchased and processed via industry specific software. The month end figures are then given to the bookkeeper for sage. However the accountant wanted sage to reflect the web items. I'm begining to think that the items sold on the web which have specific sales and purchase codes in sage are then not deducted from this stock figure given monthly by the industry specific software , therefore it's being counted twice.

However, as not all purchases would be sold in the same month, we use the stock calculations to ascertain how much of previously held stock has been sold and how much of new stock is still held by the company.

I am not sure if this explains you better. If you need any further help drop me a line with balance sheet figures for 1001, 5200 and 5201 i will try to explain this better.

Naveen


Thank you for your reply.
I'm still getting my head around the P&L and am spending a day next week with the current bookkeeper to see the month end procedures. I can then see if the monthly stock figures are meaningful from the other software and if the journals are done the way I'm expecting (from the pauline / stardoe instructions on http://www.book-keepers.org.uk/t39314627/stock-sage-help-please/.)

You have been helpful in making me work through.

Kindest Regards

Jane