Sage 50® Accounts For Dummies®, 4th Edition
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This edition first published 2016
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ISBN 978-1-119-21415-1 (pbk); ISBN 978-1-119-21416-8 (ebk); ISBN 978-1-119-21417-5 (ebk)
Sage is a well-known accounting system used in more than three-quarters of a million small- and medium-sized businesses in the U.K. The range of business software continually evolves, and Sage’s developers pride themselves on listening to their customers for feedback on how to improve the software. This results in regular revisions and updates that add new features to Sage each time.
This book offers you a chance to understand how Sage 50 Accounts can help you run your business effectively. Thoroughly revised to cover all the latest Sage updates, I hope you get a lot out of this fourth edition, which covers Sage 50 Accounts version 22.
The aim of this book is for you to get the most from Sage. I use lots of screenshots to help you navigate your way around the system and offer tips to help you customise the programs and reports contained in Sage in language you can understand, even if you’re not an accountant.
Wherever possible, I show you the quickest way to do something, because you can often do the same thing in more than one way. I understand that you want a quick start, so I show you the easiest methods of doing things. You can always add details later, when time permits.
This book presents information in a modular fashion so that you get all the information to accomplish a task in one place. I don’t ask you to remember things from different parts of the book; if another chapter has information relevant to the discussion at hand, I tell you where to find it, so you don’t have to read the chapters in order. You can read the chapters or sections that interest you when it suits you.
This book includes a lot of instructions on how to proceed with various tasks in Sage. Wherever possible, I use numbered lists to indicate the order in which to do things. Names of windows, screens and menu choices are capitalised. This little arrow → indicates the path you click through in a series of menu options.
Because examples can help you see how a concept works in real life, I created Jingles, a fictitious party-planning company, and I use its owner Jeanette to demonstrate some of Sage’s reports and functions.
Within this book, you may note that some web addresses break across two lines of text. If you’re reading this book in print and want to visit one of these web pages, simply key in the web address exactly as it’s noted in the text, pretending as though the line break doesn’t exist. If you’re reading this as an e-book, you’ve got it easy – just click the web address to be taken directly to the web page.
While writing Sage 50 Accounts For Dummies, 4th Edition, for version 22 of Sage 50 Accounts, I made some key assumptions about who you are and why you picked up this book. I assume that you fall into one of the following categories:
Every For Dummies book uses icons to highlight especially important, interesting or useful information. The following icons are used in this book:
In addition to the material in the print or e-book you’re reading right now, this product also comes with some access-anywhere extras on the web.
Head to www.dummies.com
and search for “Sage 50 Accounts For Dummies Cheat Sheet” for a useful cheat sheet, which includes a handy keyboard shortcut checklist, a list of at-a-glance U.K. tax codes and information on how to contact Sage. You can also find a table comparing the features in the Sage 50 Accounts product range to ensure you’re using the best version for you.
You’re now ready to enter the world of Sage. If you’re a complete beginner, starting at the beginning and gradually working through is probably best. If you’re an existing user but a little rusty in certain areas, you can pick the chapters that are most relevant to you, probably in Parts 4 and 5. This book is designed for you to dip in and out of. I hope that you find it a useful tool for developing and managing your business.
Part 1
IN THIS PART …
Meet the Sage product range and decide which product is going to be the most useful to you.
Install the Sage software and go step by step setting up your records and chart of accounts.
Discover the tricks and tips for assigning nominal codes and navigating around the system.
Find out how to enter and check your opening balances.
Chapter 1
IN THIS CHAPTER
Introducing the Sage software range
Installing and registering Sage software
Getting help from the wizards
Making your way around Sage
In this chapter, I introduce you to the Sage 50 Accounts software range. I show you how easily you can install the software and give you a guided tour, so that you can get up and running quickly – essential for busy people.
Sage works on the principle that the less time you spend inputting your accounts, the more time you spend on your business, so it makes each process as simple as possible.
Sage’s developers understand that every business is different, and each business has different needs. As a result, they’ve developed a range of accounting software designed to grow with your business, whatever it is. The three levels of Sage 50 Accounts software start with basic features and finish with a product that contains all the bells and whistles you can possibly want. These versions of Sage are as follows:
There is more than one way to install your Sage 50 software. Currently, Sage offers the software as a digital download, but if your Internet speeds are not what they should be, then you may prefer the traditional method of buying the product off-the-shelf and loading the CD. Whichever you choose, Sage guides you seamlessly through the process to ensure you load the software as efficiently as possible.
Whichever method of purchase you use, you should receive a serial number and activation key. Without these two pieces of information, you can’t successfully load the software. But don’t worry: If you purchase a genuine copy of Sage software, you have the necessary activation information.
You also need some details about your company:
Follow the download instructions or insert your CD into the disk drive and follow the instructions on-screen. The Installshield wizard runs and proceeds to install Sage on your computer.
Sage lets you know when the program has installed successfully. Then you can really get cracking.
Of course, you’re champing at the bit and want to get going with Sage, so double-click the new Sage icon on your desktop to get started. The Activate Sage Software window opens, as in Figure 1-1. Sage asks you to enter your activation key and serial number. If you don’t have this information, click the MySage button and follow the online instructions.
After you enter your activation key and serial number, click Continue and the Active Setup wizard opens. The wizard guides you through several different screens where you enter information as requested.
The first screen, shown in Figure 1-2, gives you four options:
Choose whichever option is best for you and click Next.
The following steps take you through the process of setting up Sage for the first time.
Click Set Up a New Company and then click Next.
The Company Setup screen opens and Sage prompts you to enter your company’s information such as name, address, and contact details, as in Figure 1-3.
Make the setup speedier by putting in just the company name. You can complete the other information later by clicking Settings on the main toolbar and then selecting Company Preferences.
Click Next to access the Select Business Type screen.
A screen appears that prompts you to Select Business Type, as shown in Figure 1-4.
Click the appropriate business type.
For example, I chose Limited Company for my fictional greeting card company, Jingles. If you don’t know your business type, ask your accountant. Whichever business structure you choose, Sage applies the appropriate nominal codes and profit-and-loss and balance-sheet reports for your accounts.
Click Next and select your financial year.
Jingles ends its financial year on 31 March 2017, so the financial start date is April 2016, as in Figure 1-5.
Click Next and fill in your VAT details.
If you’re not VAT registered, click No and go to Step 6.
If you’re VAT registered, enter your registration number and use the drop-down arrow to select the appropriate VAT rate, as shown in Figure 1-6. You must enter the current standard VAT rate if that’s the rate you’ve selected. Our example, Jingles Ltd, is VAT registered.
Don’t enter any transactions until you’re certain of the VAT scheme under which you operate. Failure to use the correct scheme means Sage calculates your VAT incorrectly. Applying the wrong VAT scheme can be extremely messy.
Click Next and choose the type of currency you use, as shown in Figure 1-7.
Click Next again. Note the currency option is available only if you use Sage 50 Accounts Professional, unless you have chosen to add this as a module.
Click Next to confirm the details that you have entered on the previous screens.
If you are happy with those details, then click Create. If you need to make any changes to your data, you can click Back and revise the information. See Figure 1-8.
The system now configures, and the next screen asks if you want to customise your company. See Figure 1-9.
Click the Customise company button, and a wizard-style menu appears, where you can choose to set up the defaults for your customers, suppliers, bank, products, financials and administration. Sage offers some helpful videos to assist you in setting up the individual modules. Fill the tick-boxes as you complete each section.
If you click Setup Now on the main wizard-style menu, Sage automatically takes you to the default screen for whichever module you want to set up. Figure 1-10 shows an example of the Customer Defaults window in the Customers & Sales module.
If you prefer to use a step-by-step process, Setup Now is probably the way for you. However, in this chapter I work through setting up the modules manually so you can see where all the options are within Sage. To set up manually, click Close on the Customisation screen (refer to Figure 1-9) and return to the Getting Started page.
Note: If you don’t have time to continue with customising your company, then you can click Close and choose to do this later. In order to restart the customisation process, simply click Help from the main toolbar and choose the Customise your company option from the drop-down menu that appears.
After you install Sage, when you next open Sage it may prompt you to register it. You have the option to register now or later, as shown in Figure 1-11. Registering straightaway is quick and easy. Click Register Now and the next screen prompts you to complete your personal details.
After you complete your details, click Register Now. Sage checks your details. If registration is successful, a new activation key appears on the screen and in your email inbox. The email confirms you’ve registered your product and shows you your Serial Number and Activation Key. Keep this information in a safe place, because you may need it if you ever need to speak to Sage customer services.
Sage is a user-friendly system, using words and phrases that people easily understand rather than accounting jargon. Sage also has a lot of graphics to make the pages look more appealing and easy to navigate. For example, the icons that appear on the Bank module screen look like the entrance to a grand building – like the Bank of England, perhaps.
Sage uses terms that users understand and combines a mix of accounting terms with words such as ‘customers’ and ‘suppliers’ instead of ‘debtors’ and ‘creditors’. Accounting terminology isn’t done away with altogether, however – for example, Sage refers to nominal codes, and you still have to print aged debtors and creditors reports.
When you open Sage, the first screen you come across is the Welcome screen, as shown in Figure 1-12. This screen provides useful links and various Help pages, including a page that shows you what’s new in Sage 50 Accounts.
At the top of the Welcome screen is the name of your version of Sage – Sage 50 Accounts Professional, for example – followed by the company name you entered when you set up Sage. (Refer to the earlier ‘Setting Up with the Active Setup Wizard’ section, which walks you through getting Sage up and running.)
The Sage 50 desktop is divided into four key areas:
The Menu bar runs horizontally across the top of your screen and provides many navigational tools to help you find your way around Sage.
By clicking the different Menu bar options, you gain access to submenus and different parts of the system. I talk about each option on the Menu bar in the following sections.
Clicking File gives you options to create, access, save and share data. The submenu options are as follows:
Backup: This lets you back up your data. You can also back up your data when you exit the program. I recommend you back up your data each time you use Sage, or at least at the end of each day. Backing up more often during the day is a good idea if you process significant amounts of data. For the lowdown on backing up your data, check out Chapter 9.
You can use Edit to cut, copy, paste, insert or delete rows, duplicate cells, or memorise or recall data.
The status bar is the narrow strip across the bottom of your screen, showing the name of your Sage product, today’s date, the start of the financial year and the current transaction number. You can switch this bar on and off. You can also view the user list, which shows who is currently logged in to Sage.
The modules are essentially the different components that form the whole of the Sage accounting system. The modules include the usual accounting ledgers, such as customers, suppliers, bank, nominal ledger and reporting functions, but they also include (depending on which version of Sage you purchased) additional components, such as projects, sales order processing and purchase order processing. You can also access invoicing, quotations, fixed assets, departments, VAT, and transactions functions, wizards and a diary.
The settings include the Configuration Editor and Company Preferences, which hold some of the basic information about your company and the way you installed Sage. Settings also include many of the default screens for the ledgers, which save you time when setting up records at a later date. If you use the Customisation wizard when you install Sage, you may have already seen these default screens. If you need to change the system date or check the financial year, you can do it within settings. Settings also give you access to your Sage security settings and passwords to protect your accounts data. The settings include the following:
Control Accounts: This gives you an at-a-glance list of all the control accounts within Sage. A control account is a summary of all entries within a specific ledger. For example, the sales ledger control account includes all transactions for all sales ledger accounts – the balance on the control account tallies with the sum of the sales ledger accounts. Control accounts are used as a check on the numerical accuracy of the ledger accounts and form part of the double-entry system that Sage performs when you enter transactions.
If you want to change the control accounts, do so before you enter any transactions – otherwise, leave them alone!
You can reconcile a control account. Just click Help and follow the instructions for reconciling debtors or creditors.
The Tools option is a hotchpotch of items. You can run the Global Changes wizard, carry out contra entries, run period ends, open up Report Designer and convert reports, to name but a few. I outline the options here:
Activation: This lets you upgrade your program and enable third-party integration with the Construction Industry Scheme (CIS) and foreign traders (if you have Sage 50 Accounts Professional). Third-party integration lets you use add-on software tailored to your specific industry. Sage has a separate module for CIS and the recording of payments to subcontractors. You can activate this scheme by clicking Tools and then Activation for businesses that fall under the scheme.
You can use the Upgrade Program option to register after your initial 30-day Sage trial period runs out.
You can store your favourite reports here. To find out how to set up favourite reports, use the Help menu supplied with Report Designer, which you access via Tools on the Browser toolbar. In Chapter 18 I go into more detail about the Report Designer.
Weblinks gives you a number of links to useful websites, such as Sage shop and HM Revenue & Customs (HMRC).
Help is the last entry on the Menu bar but probably one of the most useful. If you want to understand more about the system and want to know how to do something, click the Help option. You have several help options to choose from, all of which take you to a Webhelp page where you can enter your keyword and click Search to find answers to your problems. In addition you can find the Customise Your Company wizard here, which you may have discovered when you first installed Sage. You can access these screens and amend your module defaults and other administrative functions at any time.
The About page now contains a raft of information about your computer, including system details, licence information and contact details for Sage. Sage support staff often find this page very useful if you ask them for help with software problems.
A number of wizards wield their technological magic through Sage. Their job is to help you through a wide variety of setups and tasks. You can access these helpful creatures from the Menu bar by clicking Modules and then Wizards.
Wizards can help you in setting up Sage and day-to-day processing. They can help you set up new records for customers, suppliers, nominal accounts, bank accounts, products and projects. You can also use wizards to do the tricky double-entry bookkeeping for items such as opening and closing stock, fuel scale charges and VAT transfers. Sage even provides a wizard to help you set up the foreign trader features. In Chapter 23 I offer lots more info about Sage’s wizards.
Chapter 2
IN THIS CHAPTER
Getting familiar with some accounting concepts
Charting your accounts
Adding nominal codes in your chart of accounts
Changing your chart of accounts
In this chapter, I get down to the nitty-gritty of the accounting system – the chart of accounts (COA), which is made up of nominal codes. Think of the COA as the engine of the accounting system. From the information in your COA, you produce your profit and loss report, your balance sheet, your budget report and prior-year reports. Set up your COA properly and the chart grows with your business – but set it up wrongly and you’ll have problems forever.
Luckily, Sage gives you a lot of help and does the hard work for you, but you still need to understand why Sage is structured in the way that it is and how you can customise it to suit your business.