Suspense Accounts in Sage

[FIJDesign]

Hi

I am currently in the process of moving all my paper-based records into Sage Instant Accounts. I am starting it from a new financial year and have just entered all my opening balances from the previous year, which include:

1) Outstanding invoices from customers
2) Money that we have in the business bank account
3) Set up another bank account as a 'Director - Loan Account' and set this to the amount we owe one of the directors (this is due to the fact he had previously purchased business items on his personal account and we plan to pay him back over time)

Looking at the Ledger, everything seems to make sense, except I am unsure about '9998 - Suspense Account'. This code is showing the difference between the amount we owe the director (3) and the money owed to us and in the bank (1+2).

Is this correct? Is the aim to get this account to zero, because I cannot seem to do this? I have been entering invoices and receiving payments into the business bank account, but it never seems to reduce this suspense account amount.

I am not an accountant, so my experience is limited (as you can probably tell), but any advice would be great Thanks

 

[sheelagh]

The esiest way to set up your accounts would have been to post a journal with all the balances on your closing balance sheet from the previous year. This way you would have all the credit and debit balances in the right place.
This assumes you have a balance sheet.
It would be easy enough to go back into your bank account and directors loan account and change the opening balances to nil. This should clear the suspense account to nil.
I confess I am a bit baffled why your suspense account balance does not also include the total of your unpaid customer invoices. Normally when enter opening balances to customer accounts the "other side" of the entry goes to suspense account. You would then journal (DR 9998 CR 1100) to clear these two accounts back to nil. Then enter a journal, dated the day before your current financial year, with all your balance sheet balances.

 

[RAL]

I confess I am a bit baffled why your suspense account balance does not also include the total of your unpaid customer invoices. Normally when enter opening balances to customer accounts the "other side" of the entry goes to suspense account. You would then journal (DR 9998 CR 1100) to clear these two accounts back to nil. Then enter a journal, dated the day before your current financial year, with all your balance sheet balances.

It may be possible the OP enter outstanding invoices as individual instead of as an opening balance.

The missing items could be, capitals, assets, loans, creditors, accrual, prepayment etc.

 

[FIJDesign]

Normally when enter opening balances to customer accounts the "other side" of the entry goes to suspense account. You would then journal (DR 9998 CR 1100) to clear these two accounts back to nil. Then enter a journal, dated the day before your current financial year, with all your balance sheet balances.

Thanks for this advice - I don't have a balance sheet (as we are a startup) but I have managed to sort out the accounts by posting journals, as you advised.

I have followed your advice in regards to DR 9998 & CR 1100, which put the accounts back to nil. I have now received a payment for one of the customer opening balances for £250 and now the Debtors Control Account shows a credit of £250. Do I have to have to put this against one of my sales accounts to indicate what this payment was for? If so, what is the best way to do this?

Sorry for my lack of understanding - still getting the hang of this :| but your advice is a great help

 

[FIJDesign]

I think I have found the answer to my question above from another forum - I have now set an opening balance on the Debtors Control Account of the sum of all my customer opening balances, and now everything seems to tally up.

If anyone disagrees with this method, please let me know.

Thanks for all your help

 

[FIJDesign]

Looks like I spoke too soon as this opening balance debit on the debtors account above has created another matching credit on the suspense account (obviously...lol), so seems im back to square one :|

 

[Williams lester]

I am currently in the process of moving all my paper-based records into Sage Instant Accounts. I am starting it from a new financial year and have just entered all my opening balances from the previous year,

Thanks for this advice - I don't have a balance sheet (as we are a startup) but I have managed to sort out the accounts by posting journals, as you advised.

Don't understand....your first post said you had a previous year...then you say you are a start-up?? Which is it??

 

[weebly_one]

Looks like I spoke too soon as this opening balance debit on the debtors account above has created another matching credit on the suspense account (obviously...lol), so seems im back to square one :|

I really recommend you stop now before you end up in a real tiswas and get some advice in person at your site with your Sage

 

[FIJDesign]

Don't understand....your first post said you had a previous year...then you say you are a start-up?? Which is it??

Sorry, I have not been totally clear with this - the previous year was our startup year and we had not prepared a balance sheet for that year, for me to work from - this was just down to lack of business/finance knowledge at that time.

 

[Williams lester]

Sorry, I have not been totally clear with this - the previous year was our startup year and we had not prepared a balance sheet for that year, for me to work from - this was just down to lack of business/finance knowledge at that time.

I would suggest that you get a bookkeeper or accountant to set up the Sage accounts for you and give you some training on how to use it!

What is it your business does?

 

[FIJDesign]

I would suggest that you get a bookkeeper or accountant to set up the Sage accounts for you and give you some training on how to use it!

What is it your business does?

Point taken. We are a design company, offering services such as graphic and website design. I have used Sage to enter invoices and expenditure in the past (for another company) but I seem to be getting myself into a right mess with setting up opening balances for my own company, as this is something I have never done before (previously, the opening balances had been done by someone else). Its the understanding of this suspense account that baffles me - I will have to try and see if I can find a helping hand somewhere to get the setting up process done for us.

 

[weebly_one]

The Suspense account is just a place for values to go until you know where the money should really be.

It comes from double entry book-keeping- every transaction has 2 sides, (debit and credit) if you only know where one side goes then you can put the other side to the suspense account. This is what Sage Does when you use the opening balance options - it puts a value in Debtors (for openeing balances on customers) and puts the other half in Suspense. When you then work out where the suspense money should be you can do a journal to zero the suspense account and adjust the values to where they should be.

If the opening balances you have put in are from a prior financial year, then they should probably be journalled into retained profit, as should any other profit and loss items which relate to the previous year. At the end of each year all items in the profit & loss account are moved into retained profit (usually 3200) on the balance sheet. This shows you the brought foward profit/loss from prior years (or in your case from your first year)

I should not get too hung up about the amount in the suspense account. Just be aware of it and ask your accountant friend for help once they have finalised your accounts from the previous year from your old manual system. You can keep using the Sage for the day to day recording of invoices and payments etc without the opening balances being correct - these can be fixed later when you can get the advice you need.

 

[Williams lester]

Point taken. We are a design company, offering services such as graphic and website design. I have used Sage to enter invoices and expenditure in the past (for another company) but I seem to be getting myself into a right mess with setting up opening balances for my own company, as this is something I have never done before (previously, the opening balances had been done by someone else). Its the understanding of this suspense account that baffles me - I will have to try and see if I can find a helping hand somewhere to get the setting up process done for us.

Have sent you a PM.

 

[FIJDesign]

The Suspense account is just a place for values to go until you know where the money should really be.

It comes from double entry book-keeping- every transaction has 2 sides, (debit and credit) if you only know where one side goes then you can put the other side to the suspense account. This is what Sage Does when you use the opening balance options - it puts a value in Debtors (for openeing balances on customers) and puts the other half in Suspense. When you then work out where the suspense money should be you can do a journal to zero the suspense account and adjust the values to where they should be.

If the opening balances you have put in are from a prior financial year, then they should probably be journalled into retained profit, as should any other profit and loss items which relate to the previous year. At the end of each year all items in the profit & loss account are moved into retained profit (usually 3200) on the balance sheet. This shows you the brought foward profit/loss from prior years (or in your case from your first year)

I should not get too hung up about the amount in the suspense account. Just be aware of it and ask your accountant friend for help once they have finalised your accounts from the previous year from your old manual system. You can keep using the Sage for the day to day recording of invoices and payments etc without the opening balances being correct - these can be fixed later when you can get the advice you need.

Thats excellent advice there - thanks so much

I will have a word with my accountant and see what he says. Thanks again.