Pimbrook Software

9860: Sage 50 – How to post adjustments into a previous financial year

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Author: samantha

Sage 50 – How to post adjustments into a previous financial year

 

When you run your Year End in Sage 50, it will post journals to clear down your Profit and Loss totals to the ‘Retained Earnings’ balance sheet account.
In doing so it allows you to account for a new financial year on your Profit and Loss.  However situations can arise where you may need to make
prior year adjustments.  Any late adjustments  should not be entered directly to Profit and Loss nominal code as it will result in a separate
‘Previous Year Adjustment’ value showing on your Balance Sheet.  Also prior year adjustment will not be accounted for on your Profit and Loss
as you will have entered these after your Year End in Sage 50 was run. The steps below will expain how to make a prior year adjustment to your correct
balance sheet’Retained Earnings’ account.

 

Before making any adjustments in Sage 50 we first recommend that you take a data backup and print off your management reports, Trial Balance, Profit and Loss and Balance Sheet.

 

How to post Adjustments for a prior year

 

  1.  In the Nominal module click on ‘Journal Entry’ icon at the top of your screen.
  2. Enter in a Reference and Date.  We recommend that you use the last date of the previous Financial Year End.
  3. Enter in the adjustments using the non-vatable tax code, by default this is normally T9 unless amended.
  4. If posting a Profit and Loss adjustment, we advise that you post the values instead to your balance sheet ‘Retained Earnings’ account,
    By default in Sage this nominal code 3200 unless amended.  if you post only to your Profit and Loss it will not be accounted for on your management reports.
  5. Once you have entered in your correct nominal codes, click ‘Save’ to post your adjustments.

 

How to identify your Retained Earnings Control account

If you are unsure of what your ‘Retained Earnings account is in Sage you can find this out by going to ‘Settings’ at the top of your Sage menu bar and clicking on
‘Control Accounts’ on the drop down list. What every nominal code is in your ‘Control Accounts’ for Retained Earnings is  nominal code that Sage posted your
cleared Profit and Loss totals to.

One you have entered in your adjustments re print your management reports, you should now see that your prior year adjustment has been included in your
Retained Earnigns total on your Balance sheet report.

 

Important Note:  Bad debt adjustments must not be posted as a journal to the debtors or creditors control accounts.  Instead it should be written off in the correct
way either by
manually raising a Credit Note or using the ‘Write of Wizard.

 

(SD)


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