Help with posting items to Nominal Ledger

[phgannon]

Hi

I've just joined and this is my very first post so please be gentle!

This post is aimed at all you professional accountants out there...

I'm an IT consultant operating as sole trader and I'm VAT Registered on the Flat Rate VAT Scheme. I started trading in Sept '08. I have no prior accounting or bookkeeping experience!

I've bought a copy of Mamut E5 to help me run my business (it's a CRM system with built in Accounts). It handles the whole end-to-end business process.

I'm now in a position in which I want to input all of my bookkeeping into Mamut and bring it up to date but I'm in need of a little help.

I need help because when I went to post the first item in my pile of bookkeeping (a transfer of personal funds into my business account) Mamut got it wrong. After much faffing I discovered that the Journal Template for this kind of transaction was set up wrong.

Needless to say this has shaken my confidence somewhat!

So, before I post anything else into the Nominal Ledger I want to double check that all of the Nominal Templates are set up correctly. I've searched and searched but I can't seem to find any info on this anywhere on the web. The closest I've got is looking at particular queries on this site.

If anyone knows of a book or a website that has this sort of info then I'd be most grateful.

In the mean time here's how the various Journal Templates are currently set up...

Capital Introduced - personal money being introduced into the business
CREDIT Nominal Code 3300 (Capital Introduced) : VAT 0 (None)
DEBIT Nominal Code 1200 (Business Bank Account) : VAT 0 (None)

Drawings - money being taken from the business for my personal use (e.g. salary)
DEBIT Nominal Code 3260 (Drawings) : VAT 0 (None)
CREDIT Nominal Code 1200 (Business Bank Account) : VAT 0 (None)

Tax or NI - pay Tax or NI to HMRC
DEBIT Nominal Code 3260 (Drawings) : VAT 0 (None)
CREDIT Nominal Code 1200 (Business Bank Account) : VAT 0 (None)

Purchase Invoice (Non VAT) - A purchase invoice from a Non VAT Registered Supplier
DEBIT Nominal Code 5000 (Materials Purchased) : VAT 6 (Purchase Zero)
CREDIT Nominal Code 2100 (Creditors Control Account) : VAT 0 (None)

Purchase Invoice (VAT) - A purchase invoice from a VAT Registered Supplier
CREDIT Nominal Code 2100 (Creditors Control Account) : VAT 0 (None)
DEBIT Nominal Code 5000 (Materials Purchased) : VAT 4 (Purchase Standard)
DEBIT Nominal Code 2201 (VAT on purchase) : VAT 0 (None)

Payment to Supplier - Pay a supplier for invoiced goods / services
DEBIT Nominal Code 2100 (Creditors Control Account) : VAT 0 (None)
CREDIT Nominal Code 1200 (Business Bank Account) : VAT 0 (None)

Sales Invoice - An invoice raised for a customer
DEBIT Nominal Code 1100 (Debtors Control Account) : VAT 0 (None)
CREDIT Nominal Code 4400 (Sales) : VAT 1 (Sales Standard)
CREDIT Nominal Code 2200 (VAT on sales) : VAT 0 (None)

Payment from Customer - Customer payment for invoiced goods / services
CREDIT Nominal Code 1100 (Debtors Control Account) : VAT 0 (None)
DEBIT Nominal Code 1200 (Business Bank Account) : VAT 0 (None)

Are these all correct? Please would an expert let me know so I can crack on and complete my bookkeeping.

Many thanks in anticipation.

Patrick

[KM-Tiger]

I'll let an accountant or bookkeeper comment on your journals.

From a business point of view, if this software is making you jump through those sorts of hoops, I think you would be better to cut your losses and ditch it in favour of something that works better for you. Your time would be better spent on other things.

With good software bookkeeping is easy.

[phgannon]

...if this software is making you jump through those sorts of hoops, I think you would be better to cut your losses and ditch it in favour of something that works better for you. Your time would be better spent on other things...

Hi KM Tiger

Thanks for your extremely quick reply to my post.

In defence of the Mamut software (which I generally find to be excellent and rate very highly) the problem arose because it doesn't have, as default, Nominal Codes set up for "Capital Introduced" or "Drawings". All the other Nominals are there or, at least, appear to be there.

It just so happened that the very first item on my pile of bookkeeping was for introducing some capital into the business and so I instantly got stuck. Having never done this sort of thing before it took me a while to fathom out what to do.

I haven't had to fiddle with anything else but, for obvious reasons, I just want to sense check that the rest of the Journal Templates are going to post items correctly and that there won't be any surprises.

The E5 version of the Mamut software (there are many flavours) isn't really aimed at the Sole Trader but more at a Ltd company so they wouldn't have this problem.

I bought Mamut E5 because I wanted a complete end-to-end solution that isn't a hosted/online system and this system, it seems, is a rarity. So, if anything, it's more my fault than Mamut's! :|

Thanks and kind regards

Patrick

[KM-Tiger]

...... wanted a complete end-to-end solution that isn't a hosted/online system and this system, it seems, is a rarity.

It is indeed a rarity, I'd say more like the Holy Grail. So if you think you have found it, and it works for your business, I can see you will forgive the odd foible.

As you rightly say financial structure is different for Sole Trader vs Ltd.

[Tej]

I would think that at a later stage when it comes to doing your year end accounts, you will need an accountant to do the tweaking. Would it not be better to get one now, when you are starting out with the bookkeeping to get a proper handle of the nominal codes etc. They could guide you in a few minutes, and save you a lot of grief now and more so later.
Its definitely cost effective IMO. There are a lot of good ones on this forum. Check them out and pick one that floats your boat:)

An accountant is not a luxury in any business, but a neccessity.

just my 2 cents

[phgannon]

I would think that at a later stage when it comes to doing your year end accounts, you will need an accountant to do the tweaking. Would it not be better to get one now, when you are starting out with the bookkeeping to get a proper handle of the nominal codes etc. They could guide you in a few minutes, and save you a lot of grief now and more so later.
Its definitely cost effective IMO. There are a lot of good ones on this forum. Check them out and pick one that floats your boat:)

An accountant is not a luxury in any business, but a neccessity.

just my 2 cents

Hi Tej

Thanks for your reply but... urm... I have got an accountant and I've emailed this query to her but, so far, I haven't heard anything back.

I was hoping that someone here might be able to help in the meantime.

Could any professional accountant out there help me out... please?!

Patrick

[Lottie Wise]

Hello

Just want to say thank you for posting the information on Journal Entries.

Currently studying finance and sometime the information is a little hard to understand in the text books and you've explained it much better.

Thank you in advance.


Lots:redface: