How to record savings

[ElinaWhitt]

Hi there,

Just wondering if anyone can point me right direction.
We have just started Christmas savings scheme and £320 are now "hanging in air" due to me not being able to figure out how to record it.

I currently have
2220 Net pay credit balance of £320
savings has been transferred to our deposit account.

How do I record it on sage?

Thanks,
Elina

 

[CriticalThinker]

I am assuming that this money is being put aside until Christmas and then being paid back to the employees from which it has been collected therefore a liability needs to be recognised up until the point it is paid.

Looking purely at the accounting for this, and not the scheme mechanics itself, you may be best to set up a nominal code (say 2221 called 'Christmas Savings Scheme') and post a journal entry to DR 2220 net wages and CR 2221 Christmas Savings Scheme (the credit balance of £320 representing the liability due). When you next post your wages journal you can journal the deductions for the scheme directly to NC 2221 and this will keep a separate tally of the amount due to be paid at the end of the year.

The above journal will clear down your net wages account to £0.

There is no need to over complicate this so hope that helps