Hi I work for a Private nursery and we are implementing Sage 50. I scrolled through all the threads on SAge codes and found few answers but still have some uncertainties. Could anyone please help me with allocation of nominal codes for following payments :
1. Food purchased for nursery meals
2.Toys and books
3. Educational supplies and arts &crafts
4. CD players, cameras other electronics purchased for nurseries
5. Activities like fitness classes, french tuition and dance lessons for children
6. Childrens cuttlery
7. Toliletries and care essentials
8. Bed linen for cots
Thank you very much. Would also appreciate hints on any sources on accountancy for day childcare.
So to answer your questions, 1 would be 5002, 2 5001, 3 probably split between 5000 and 5001, 4 5000 unless the amount is big enough to be in the fixed assets, 5 5003, 6 5000, 7 5004 & 8 5000.
Let me know if there is anything else I can help with.
What you need to do is to work things out for yourself.
I would start by separating the items into groups.
Things that are will last for years and that will need to be depreciated (Assets)
Things that are consumables and directly related to the number of sales (Direct Costs)
Things that are semi related to the numbers of sales (Production costs)
Things that are unaffected by the number of sales. (Overheads)
This gives you the first part of the nominal code.
Assets 00X0 (00X5 for the depreciation)
Direct Costs (5xxx)
Production (6xxx)
Overheads (7xxx or 8xxx)
within each section you want to try and create some sort of groupings and a sense of order between sections.
So for example :-
You could group all the different "fees" for the nursery in codes 40xx and all the optional extras in codes 41xx
If you have food being purchased for meals that are an extra, you might create a nominal code eg 5105 and you would also create a matching sales code of 4105 you can now determine the profitability of meals, by taking one number form the other.
So ---
1/ Is the food included in the fees of all clients? If it is and then you can lump it all in a matching 5xxx code to the Fees 4xxx code If there are only some clients that get food and they are separated out in their own nominal for sales then this cost relates to that income so I would make a matching 5xxx code for it. Is the food for the staff and nothing to do with kids? Maybe it is a cost of employment 700x or 600x perhaps
2/ Toy and books, Are these a consumption or are they an asset? A playground slide is an asset but a flimsy book that might not last a week and is a consumable cost directly related to the numbe rof kids so 5xxx
3/ Educational supplies and arts and crafts, these are generally consumables and the quantity needed is related directly to the number of pupil days, so 5xxx
4/ Again a grey area, perhaps an asset, perhaps not.
5/ These are a 5xxx code and I suspect they will have matching 4xxx code
6/ Again a grey area, perhaps an asset, perhaps not.
7/ Production cost 6xxx
8/ Again a grey area, perhaps an asset, perhaps not.
There are as many right answers as there are people. You need to decide for yourself, perhaps in consultation with the managers what is needed, how things are considered/regarded.
In general Assets tend to be avoided as the expense is spread over years and in a profitable business this can give a bigger tax bill this year. On the other hand a business being prepared for sale, with low profits, or with losses might prefer to bank the expense as taxation this year is not such a big deal.
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You see I in general have a problem with differentiating between Direct expenses 6***and Purchases 5*** . Both are directly transferring value on the end product- Nursery fees in my case. For example activities like French lessons could be considered as sub-contracting and put on 6002. Because teachers are invited to nurseries and in a way take over nursery teachers for a duration of the lessons. Also cutlery doesn't directly impact on cost of fees so perhaps should be an expense 7*** ? The same camera, and cd player that cost too little to be considered as an asset.
Helen I did the same as you and was happy until I started thinking and rethinking(bad idea). I will leave it brew over weekend then start from fresh on monday.
