New Sage User - Help required

[phil2sheds]

Hi

I am new to this forum and to Sage, and would appreciate some help on a couple of things.

We have set up a new company - lets call it Newco, which will eventually take over all our business activities of oue existing company - Oldco.

Whilst awaiting the payment of our initial invoices issued by Newco, Oldco has:
a) Transferred some cash sums to Newco and
b) Paid some invoices on behalf of Newco, mainly for services now pertinent to Newco, and also for salaries etc.

Using Sage Instant accounts, how would I account for the cash and invoice payments in Newco (book keeping for Oldco will be dealt with by accountants, which we are no longer using for Newco)

As I have said, I am new to this, so please be gentle and try to explain in idiots terms.

Any help would be much appreciated

Phil

[Devon Julie]

Hi Phil. First of all, I'm not an accountant, but do use Sage Instant accounts. Hopefully the information I provide is accurate (I'm sure someone will tell you if it isn't....) It's what I'd do.

First question - Am I to assume that you aren't using Sage for Oldco? If that's the case, then, set up Sage for Newco for the appropriate fiscal year start date. Hopefully this corresponds to your company start date.

- Set up a nominal code for "Intercompany Loan" (somewhere in the 2000 area - The cash injection from Oldco can be put in there. This protects the directors if anything goes wrong and keeps the money in a separate area. - In Sage, log it as a bank receipt into the dummy account (see below)
- Set up your suppliers, including Newco as one. (This is the account where you'll put all the invoices that Oldco is handling against .
- Log supplier invoices, wages, etc (using normal nominal coding for the type of service such as office furniture, phone, etc) as normal, placing them against Newco.
- Set up a bank account in Sage for Oldco (similar to setting up an account for Paypal, co credit card, checking, petty cash, etc.) It's a dummy bank account to show the transactions that Oldco is conducting for Newco. Place the amount of the loan here.
- When you go to log payment for any invoices, salaries, etc that are being done through Oldco, pay them from the Oldco bank account.
- When Newco takes over its own accounts, you will have to transfer money from your Newco bank account into the Oldco bank account (paying Oldco back) in order to reconcile the accounts and to pay off the loan.

When the time comes, this will be done as a transfer from your normal operating account into the Oldco bank account, thus bringing it back to a zero balance.

This keeps everything nice and tidy and will make your year end that much easier...

Hopefully this helps. Have a good weekend and if I can help further, let me know!
Julie

[phil2sheds]

Julie

Thanks for this. This pretty much confirms what I had worked out. I will try this in the test account, and see if it makes sense to me.

Kind regards

Phil

[Andrew @ PLA]

Hi Phil

Have you got an Accountant lined up for 'Newco'?

[Williams lester]

Hi Phil

Have you got an Accountant lined up for 'Newco'?

I can recommend one, if you need :p

[phil2sheds]

Andrew

Yes we have thanks. Just trying to do as much as possible myself this time. Just leaving CT and end of year for the accountants.

Regards

Phil

[Andrew @ PLA]

I can recommend one, if you need :p

Thanks very much ... that's really kind of you ;)

[MyAccountantOnline]

Hi

I'd use Julies suggestion of the inter-company account.

At some stage your former accountants should provide you with a note of the actual balance to be transfered to the new company and you can at that stage make any adjustment(s).

[Williams lester]

Thanks very much ... that's really kind of you ;)

It certainly is...but then it's Friday. And to make my mood even more generous, the ridiculous golf thing taking place here is suspended due to the weather.......what did they really expect, holding it in South Wales! :eek:

[Andrew @ PLA]

I don't think it is the location that is the problem, more the time of year - its October for goodness sake! Not really a golf fan, but always good to see the yanks get stuffed at most things .....