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Post Info TOPIC: Purchase/Sales


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Purchase/Sales


Hi All,

Can you please advise, we have an external company who is dealing with our daily cash ( collecting cash of daily sales ) + does payroll on daily basis.

Once a week they issue remittance advice as follow: 

e.g.

Sales                                          5000.00 Net

Deduction ( commission )               800.00

VAT    e.g.                                     200.00

 

Payroll                                        1000.00

-----------------------------------------------------------------

total amount they have to pay us is: 3000.00

So, I have to create a sales invoice of 3000.00 ( however we wont see the real sales i.e. 5000.00 ), purchase invoice of 1000.00( commission ) and have to post cost of Payroll ..

I'm not too sure how i should allocate payment of the purchase invoice & payroll as it has been deducted already by them...?

 

Can someonehelp please?

Thanks

Anna 

                                    

 Ps. I have attached the RA. 

 

 



-- Edited by Anna12 on Sunday 5th of June 2011 12:52:58 PM

Attachments
scan0001.pdf (434.4 kb)
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AnnaP


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Hi Anna

Can you supply a little more information.

Is your client vat registered (looks like it should be)

The payroll figure that you quoted, I assume is the net pay to employees. Are you being supplied with the rest of the payroll info you'll need?

One thing I would point out, is your sales turnover certainly isn't £3,000 and your instinct that it should be £5,000 is more like it (depending on your answer to the vat question).

I've not read the RA, but in principal, you'll need to record:

Total Sales

Less Total expenses / deductions (as appropriate).

This will then equal cash received, which in itself isn't sales income.



-- Edited by ADAS on Sunday 5th of June 2011 02:01:21 PM

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Tony

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Hi Tony,

Thats right, I have to post the total sails. I have attached pdf file if you could have a look on it?
You will see there:

Total gross sale ( will issue an sale invoice net + vat for our records )
Their Commission ( enter purchase invoice net +Vat )
Bank charges will post directly to bank account in sage
Payroll I think will post it directly to nominal account
Other charges- will post also directly to nominal account

The thing Im not too sure is: if the total sales is e.g. 5000.00 all deduction e.g. 2000.00 so, there still will be shown balance of 2000.00 which I have posted directly to nominal accounts as stated above.
Should I issue a credit note or there is other method in sage to bring the balance to 0.00??

I wonder also of the bank rec because there will be stated the total amount after all deductions?

thanks
Anna

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AnnaP


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one thing yet, the payroll is gross.

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AnnaP


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In relation to the payroll I think I have to post journals of the net and gross amount, is that correct?
Anna

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AnnaP


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Leaving payroll to one side.

All your missing is a control account. Personally, I would open a "dummy" bank account for this supplier and that'll solve your bank rec concern. Once you've posted all the income and costs correctly, the balance you're left with I would transfer from the dummy bank account to the actual current account. This will equal the physical cash you receive.

You can then reconcile the dummy account each period back to nil.



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Tony

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Anna12 wrote:

In relation to the payroll I think I have to post journals of the net and gross amount, is that correct?
Anna


 

 Pretty much but I'm off out to the pictures with my kids, so someone else will no doubt help you with that bit. 

One word of encouragement though, if you need it. You'd pretty much worked everything out already smile



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Tony

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In relation to the Payroll, I would post is as follows:

e.g.
Dr Cr
Staff salaries
Employers PRSI
PAYE/PRSI Control
Net Pay Control

and that will be transfered from dummy bank account

As you have stated I should do the rec of dummy bank account, say once a month. Should I post a journal to bring the balance to 0.00 as follow:

e.g.
Dr Cr
3000.00 3000.00

However Im not too sure of the nominal account I should use to do it?

Can you please advise?

Thanks
Anna



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AnnaP


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Hi Anna

Isn't the £3k what you actually receive into your clients bank a/c? It should be just a matter of

Dr Current a/c
Cr Dummy bank a/c

You can enter this as a journal or a bank transfer.

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Tony

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Hi Tony,

Yes, the 3000.00 I have received from my client and posted into their account, however the total sales was 5000.00. So, as you have mentioned above the balance of 2000.00 will transfer for the dummy b/a.
I have to do the same with Payroll, purchase invoice ( their commission ) and other charges on the very and balance of the dummy b/a will be e.g. 4500.00 and I have bring it to 0.00 end of each month. Do you think if that is correct?
Thanks
anna


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AnnaP


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Hi Anna

Not quite.

1. Receive £5000 into the dummy account from sales.

2. Pay £800 for commission and £200 vat to the supplier

3. Pay £1000 from the dummy account to the Net pay account

4. This leaves £5000 - 800 - 200 -1000 = £3000 left in the dummy bank

5. Transfer the £3000 from the dummy bank to your current account

Therefore

1. Current account will show £3000 received

2. Dummy account will be nil. (step 4 above - £3000 transferred in step 5)

Hth



-- Edited by ADAS on Monday 6th of June 2011 06:00:01 PM

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Tony

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thanks very much Tony, thats really helpful :)

Regards,
Anna

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AnnaP


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Hi Tony,

There is actually one thing Im wondering at, after these all transaction you have stated above Im still going to have a balance on sale invoice of the 2000.00 as it was posted into purchase invoice and payroll ( deductions ). What should I do with it?
Anna


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AnnaP


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The 5k what they collected from you is your sales, isn't it? So when you process your sales process it to your dummy a/c- now you have the 5k there. From there you pay the above and the left over goes to your bank. The company is collecting your daily cash sales but it is still your money! - your income from sales. It is not a new sales invoice...

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Attila



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Hi Anna.

As Attila replied about you post a receipt of £5000 from the dummy bank account. Technically the company collecting has paid you £5000, they've just taken the £2000 owed to them at the same time.

Maybe think of it this way. Your friend owes you £20 but you over her £15, so she just gives you the £5 difference.


Hi Attila, Anna mentioned raising the invoice in her first post, so I though it better to stick with the method she was used.



-- Edited by ADAS on Tuesday 7th of June 2011 09:29:51 PM

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Tony

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Hi All,

Im not too sure if I have explained correctly,

The total sales is  e.g. 5000.00 ( including  VAT )  - I have to create weekly sales invoice for our records

Commission  e.g. 800.00 + 200Vat  - Will issue purchase invoice

Payroll 1000.00 will transfer directly to Nominal Account from the dummy b/a

 

Will transfer in the Dummy b/a 5000.00

Pay the purchase invoice 800.00 +200.00

Pay the Payroll                   1000.00

                     Total paid       2000.00 and 3000.00 of balance left

 

Now I have to pay the sale invoice of 5000.00 however only 3000.00 left in the dummy b/account so, there will be 2000.00 to be paid yet. Im not too sure how can I bring it to 0.00 balance.

 

Please advise.

Anna



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AnnaP


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Anna12 wrote:

 Will RECEIVE INTO the Dummy b/a 5000.00

Pay the purchase invoice 800.00 +200.00

Pay the Payroll                   1000.00

                     Total paid       2000.00 and 3000.00 of balance left

 

 Anna. The £3,000 balance left in then transferred to current Account,


HI Anna

The £5000 must be done as a Sales Ledger Receipt, I think this is where you've been getting confused. You're correct above but the last stage is to transfer the £3000 to the business current account.

This should be the same as the remittance the collecting company sends you and will match what the physically paid into the account

 



-- Edited by ADAS on Wednesday 8th of June 2011 08:40:58 PM

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Tony

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Uff, finally I know how to do it ))) Tomorrow will try to do the sales ledger receipt in Sage and rest of the transactions... Thank you very much for your help!!!
Regards,
Anna


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