In every job I have had since leaving school, I have always used Sage 50 Accounts. I even worked for Sage as a trainer to external customers on the Sage 50 suite.
Now, as an accounting tutor, I am still using Sage 50 Accounts, and still giving out the same advice, which is: don’t take for granted that the computer is always right! When using the software, don’t just assume that you can simply put in the data, and it will churn out perfect information.
You still have to understand:
- What you are doing
- Why you are doing it
- What to do if it all goes wrong
The nominal structure
The most important aspect of setting up and processing in Sage 50 Accounts is the nominal structure, which is found in the company menu.
This is the general ledger, or the analysis ledger as I like to call it. It’s where we record not just where we have spent and received money, but what we have spent the money on, and why we have received it.
It’s imperative to understand the structure of this, as how you set it up will determine the information that is produced.
All accounts can be classified as follows:
- Non-current assets
- Current assets
- Non-current liabilities
- Current liabilities
In Sage 50, these classifications are coded, and the first number of the four digit code tells us which type of account it is:
- Revenue accounts begin with a 4.
- Purchase accounts begin with a 5.
- Overheads begin with a 7 or 8.
- Non-current assets begin with a 0.
- Current assets begin with a 1.
- Liabilities begin with a 2.
- Shares begin with a 3.
You can then amend or create new codes within these categories, depending on the management information you require.
Creating a new code
When you create new codes, you must stick with the same structure. So, for example, if you want a new sales code, it must begin with a 4.
To create a new code, choose company, ensure no accounts are highlighted, and press nominal record. Then type in the new code number (making sure it starts with the correct number), type in the detail, and choose save.
Amending a code
You can also amend sales codes. By default, you are given nominal code 4000 as sales type A.
What is sale type A? I don’t sell A!
Don’t panic; you can amend this code so that it reflects what you sell. So, if I am a retail outlet selling shoes, 4000 might represent the sale of ladies’ shoes. Then 4005 might represent the sale of men’s shoes.
To amend a nominal code, highlight the code, and choose ‘nominal record’. This then opens the nominal code, and the text can be deleted, and new information typed in its place. The most important thing is to make sure all like codes are together, and that you follow the classifications so that all financial and management reports are accurate.