Sage Tips

Some tips and tricks for easier use

Introduction

We do not intend this note to replace the Sage help screens or other guidance. It is simply a collection of useful tips. This note assumes that you have Sage Instant Accounts Plus. Most of the tips also apply to Sage Instant and Sage 50.

This note is in two parts. The first part is about setting up Sage to make working easier. The second part is about day-to-day use.

Setting up Sage

VAT

You can save a very great deal of work later on by setting up the VAT options correctly.

Even if you answer “no” to the question about VAT registration during the set-up process, Sage will treat you as VAT registered. If you are not VAT registered, select Settings – Customer Defaults – Record tab and set “Std Tax Code” to T9 (outside the scope of VAT). Do the same with Settings – Supplier Defaults. Sage should now assume that all transactions are outside the scope of VAT.

If you are registered to use the VAT flat-rate scheme, set up Customer defaults to use code T1 (standard rate) but set up Supplier defaults as T9 (outside the scope). You will then need to adjust manually your quarterly VAT return to take the benefit of the flat-rate adjustment.

If you are registered to use the standard VAT scheme, you will need to set up the default rates for different sales types and different expense types.

Customers ledger

You need the Customers ledger if you sell on credit and issue invoices in advance of collecting payment. It can be a good database for customer contact details.

You do not need to use Customers if you only make cash sales. You might not need to use Customers if you have only a small number of sales on credit and you need to word-process the invoices because they are complex.

Suppliers ledger

Many businesses up to quite a large size of business do not need the Suppliers ledger. They can substantially simplify bookkeeping by recording expenses as they are paid using the Bank - Payment facility.

You will need the Supplier ledger if it is important to have up to date information on costs and outstanding liabilities. For example, if you are issuing sales invoices on a “cost plus” basis and so each day must know the value of invoices received but not paid. You can benefit from using the Suppliers ledger if you are registered for VAT using the “standard method”.

Profit and loss reports

The Sage profit and loss account groups expenses together. For example, printing, postage and telephone are grouped into one heading on the report. Depending upon your business, you may find another layout more helpful.

You can achieve this by amending the Chart of Accounts. However, it is best if we talk you through the process.

Tools - Options

When Sage starts up, the default is to show you the Welcome screen and then the Customers section. Many people would prefer to go straight into either the Company or Bank sections. You can achieve this by selecting Tools – Options – View. Set Desktop - Initial View to Company or Bank as you prefer. Tick Global Settings – Don’t display the Welcome Page.

Day-to-day use

Backups

Everyone knows that you should take a backup regularly. The Windows backup function does not work. Instead, you backup using File – Backup.

On some versions, the default backup is of everything. This generates a very large backup file and takes time. You do not need to backup the report formats and layouts since you can reload those from your master disk. Instead, select File - Backup and the “Advanced Options” tab. Tick to backup Data Files only. This will give you a much quicker backup to a file of sensible size.

Change program date

Sage assumes that you are recording the transaction on the day it takes place. More commonly, you will be recording the transactions sometime later. If you are recording a batch of transactions that all took place on the same day, you can avoid making a mistake about the date of the transaction by using Settings – Change Program Date to set the default date to the date of the transaction.

Check the transaction date

When posting a transaction, make sure the date is correct before you save it.

Back-posting – DON’T

Back-posting is dating a transaction sometime in the past when you have already used a report for that period. Back-posting is very RISKY. The VAT report is supposed to pick up back-posted transactions and include them in the current period but it is possible to over-ride that accidentally.

If you have run a report for a past period and then back-posted, it can be very time-consuming for us to find out why this year’s opening balances are different from last year’s closing balances.

Please DO NOT back-post. If you find that you missed out a transaction in a prior period, it is safer to enter it in the current period with an explanatory note.

Deleting transactions – DON’T

Deleting saved transactions is so dangerous that this note is not going to hint how to do it. Just don’t attempt it.

Nominal code 9999 – DON’T

Nominal code 9999 is for use in some internal processes of Sage. Do not use it.

If you have a transaction that you cannot properly identify, post it to account 9998 instead.

Small equipment

Purchases of capital equipment should be charged to code 0020 (Plant and machinery) or 0030 (Office equipment) or 0040 (Furniture and fixtures) or 0050 (Motor vehicles).

There is no need to capitalise small purchases. You can charge the purchase of small items (less than £250 each or per set) to code 7800 (Repairs and renewals).

VAT gross and net

If you are VAT registered and have set the VAT defaults correctly, you enter the net figure for a transaction and Sage suggests the correct VAT.

If you try entering the gross of VAT figure, you will get the wrong answer. However, if you then press F9, Sage recalculates the net and VAT correctly.

Regular bank reconciliation

One of the most important checks is to reconcile the bank. That is, to check that the bank transactions recorded on Sage match with the bank statements. The bank balance recorded on Sage should agree with the bank statements.

You should reconcile the bank at least every month or every four full pages of bank statements, whichever comes first.

Understanding the account codes

Account codes up to 3999 are balance sheet codes.

The 4000 codes are for income.

The 5000 codes are for the cost of purchasing and processing goods for resale.

The 6000 codes are for productive labour costs and selling expenses.

The 7000 codes are for overhead expenses.

The 8000 codes are mainly for end of period adjustments for depreciation and bad debts but also include insurance and other odd expenses.

9998 is the suspense account and 9999 you should not use.

Missing account codes

Some codes that you might expect are not in the standard Sage coding list. Our recommended additional codes for these are:

Note that if you use an account number from 8300 onwards, the balance sheet will no longer balance. You can correct this by amending the Chart of Accounts. It is preferable for us to talk you through that process.