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I noticed whilst completing a chart of accounts that Sage groups Rent Income into the 4000's range; ie Sales. When a Profit and Loss Account is run, Sage adds this income to sales but surely this is incorrect. Should it not be classed as 'Other Income' or alternatively, under 'Overheads' but in brackets? If so, how on earth do I get the chart of account to relect this? I'd be grateful for any advice.
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- Member PM.Dip
- Practice Licence
- 194 posts
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Hi there,
You will have to edit the chart of accounts to show the rent income as a separate line on the P & L. If you are not entirely sure how to do this I suggest doing a backup first before attempting it in case everything goes pear shaped!  Alternatively you could practise on the Practice Company data first.
You need to open the Nominal Ledger - COA - Edit. Make sure Sales is highlighted in the Category type and you will see all the nominal codes included in this under the right hand window. I think in a standard COA the 4000 range is split into a few sections 4000 - 4099 being Sales, and Other Sales being 4900 to 4999. I think the easiest thing to do would be to alter the Other Sales to read 4900 to 4998 and then on the line underneath this enter Rent Income and the range 4999 to 4999. Click on Save and exit out of that. If you haven't got a nominal code in your COA for Rent Income you will have to create a new one from the Nominal Ledger (and obviously give it the number 4999).
HTH
Pauline
Edited at 05 Feb 2012 05:56 PM GMT
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Stardoesaid:
“Hi there,
You will have to edit the chart of accounts to show the rent income as a separate line on the P & L. If you are not entirely sure how to do this I suggest doing a backup first before attempting it in case everything goes pear shaped! Alternatively you could practise on the Practice Company data first.
You need to open the Nominal Ledger - COA - Edit. Make sure Sales is highlighted in the Category type and you will see all the nominal codes included in this under the right hand window. I think in a standard COA the 4000 range is split into a few sections 4000 - 4099 being Sales, and Other Sales being 4900 to 4999. I think the easiest thing to do would be to alter the Other Sales to read 4900 to 4998 and then on the line underneath this enter Rent Income and the range 4999 to 4999. Click on Save and exit out of that. If you haven't got a nominal code in your COA for Rent Income you will have to create a new one from the Nominal Ledger (and obviously give it the number 4999).
HTH
Pauline
Edited at 05 Feb 2012 05:56 PM GMT”
Hi Pauline,
Thanks for your help.
My question really relates to where the Rent Income is shown on the PNL. Sage, by default, groups this under sales but for me this is not correct. Rent Income surely should not be listed under sales at all as it will distort the GP figure. The resulting NP will be the same but for me the layout is wrong.
To my way of thinking, unless the business is a rental business, Rent Income needs to be shown on the PNL below the GP line. I just can't see any way to do this though.
Thanks again for your help,
Pete.
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- Member PM.Dip
- Practice Licence
- 194 posts
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Hi Pete,
Sorry, misunderstood the question :-)
I suppose you are right in that rental income doesn't really form part of sales, just like bank interest received and should be shown under the Gross profit line. Unfortunately there is no way to do this in Sage, so separating it out is probably the only way to go.
You could always export the P & L to Excel and change it that way, depends on what you are trying to do.
Pauline
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Hiya Pauline,
Thanks for your reply.
Guess what, I've found a way to do it in Sage! Here's what to do; Print out the TB as usual so that you can complete your COA. Keep the Rent Income as a 4000 NC ie: 4904 and then, in the COA, rather than enter it under sales, enter it under overheads. The result is a Rent Income figure shown in brackets in the overheads section. Not as good as having a seperate heading for Other Income but better than adding it to sales. We got there...Phew...
Thanks again for taking the time to help. Very much appreciated!
Regards,
Pete.
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- Companion Fellow PM.Dip
- Practice Licence
- 1137 posts
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Hi Pete
I not sure whether you are doing this for a real company , Can I ask that you check with the ICB in relation to your qualification. If is for an exam can I also recommend you contact the ICB student Helpline for guidance
Rental income does come under the turnover area in a Ltd company so what you are doing would be incorrect for either a real company Ltd , sole trader or an exam situation.
If you have a rental expense that is in overheads . It is incorrect to show income with a minus figure in overheads.
You have a Rent Income account in the Sales area and Rent account in the overheads if it is an expense.
You can give it a separate Line ie I would keep codes to 5 ,10 or hundreds I would not recommend 4999 as it generally regarded that Interest Received , Insurance Claims and Sale of Asset would be the last two.
Edited at 06 Feb 2012 08:03 PM GMT
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- Member PM.Dip
- Practice Licence
- 194 posts
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Hi Pete,
To be honest I would not have done it like that at all. Rental income may not be sales in the true sense of the word but it is part of the business income and as such should go under the "Sales" heading in your P & L.
If you were to create a new nominal code for rental income using the wizard in the COA it asks you what Type it is (Sales, Overheads, Purchases etc). If you selected Overheads, it then asks you what category to put it in.....Gross wages, Heat & Light, Fuel etc. .....where would you put it?
If you were to submit the P & L to the accountants with a credit figure in the Overheads section they will always query it. The only time when you have a credit figure in your overheads is in some instances where you have refunds of Statutory maternity pay, NI compensation etc. To put this under overheads is not good accounting practice.
Pauline
Damn...Sarah...beat me to it !
Edited at 06 Feb 2012 08:16 PM GMT
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- Member PM.Dip
- Practice Licence
- 66 posts
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sarahsaid:
“Hi Pete
I not sure whether you are doing this for a real company , Can I ask that you check with the ICB in relation to your qualification. If is for an exam can I also recommend you contact the ICB student Helpline for guidance
Rental income does come under the turnover area in a Ltd company so what you are doing would be incorrect for either a real company Ltd , sole trader or an exam situation.
If you have a rental expense that is in overheads . It is incorrect to show income with a minus figure in overheads.
You have a Rent Income account in the Sales area and Rent account in the overheads if it is an expense.
You can give it a separate Line ie I would keep codes to 5 ,10 or hundreds I would not recommend 4999 as it generally regarded that Interest Received , Insurance Claims and Sale of Asset would be the last two.
Yes, I do agree with this. Rental income is turnover; it is good to have a separate line in the COA so you can have a breakdown of the sales/income or anything else in the section. You can breakdown anything in COA to get the pnl reports as desired!
Paul
Edited at 06 Feb 2012 08:03 PM GMT”
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Hello and thanks to all for your input on this.
I stand corrected and will include, should the need arise, Rent Income under the sales category, all be it on a different line.
I would confirm that this was a general question regarding the layout of accounts within Sage. I would also confirm that this is not for a real company nor is it in any way related to an exam.
Pete.
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Unearthed this looking for some help with an assignment....
Similar to Pete - but one stage earlier in the question :)
I know how to enter a recurring payment outwards in sage - how do I show a recurring payment inwards? The recurring payments screen assumes outward payments only :(
Or do I have to remember each month that the payment should have been received?
No bank statments or bank recs are asked for/offered in the question so I can't 'capture' the figure there....
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- Fellow
- Practice Licence
- 85 posts
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Hi Theresa,
When in the 'recurring' window, click on the drop down in 'transaction type' at the top and select bank/cash receipt. You can do recurring journals, and supplier/customer payments on account there too.
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Thank you!
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