Sage Posting Debate - Who's right?!

[Katy1980]

Hi there

I have just transferred from sole trader to ltd co.

I transferred 5k to the Ltd co. bank account (just so that there was some cash in the bank).

I believe I can post a bank receipt (1200) to the directors loan nominal (2300) and it's all done! But my accountant says I must do it as a journal (but a journal does exactly they same thing doesn't it?) I questioned this, and my accountant said that if I do not do the 5k transaction as a journal, but instead I do it the way I suggested, then it could affect my P&L (but as far as I'm concerned only transactions posted to 4000+ affect P&L...?) Who's right? I am probably wrong because I'm not the professional.... But I want to be sure, because I'm now doubting my Sage ability because of it

Also, I said I would rename 2300 "Loans" to "Directors Loan" and my accountant says I must create a new 2301 code. Why? There's not any point if there are no other forms of loan going through the business... Is my accountant just being pedantic? or am I being stupid?! :|

 

[David Griffiths]

But my accountant says I must do it as a journal (but a journal does exactly they same thing doesn't it?) I questioned this, and my accountant said that if I do not do the 5k transaction as a journal, but instead I do it the way I suggested, then it could affect my P&L (but as far as I'm concerned only transactions posted to 4000+ affect P&L...?) Who's right?

You are. You accountant seems to be speaking out of the wrong orifice!

Also, I said I would rename 2300 "Loans" to "Directors Loan" and my accountant says I must create a new 2301 code. Why? There's not any point if there are no other forms of loan going through the business... Is my accountant just being pedantic? or am I being stupid?!

He's being pedantic. Or pathetic. Or both.

 

[Katy1980]

ha ha ha! Well said! Thanks for that.

I have a smug face right now!

 

[Tom McClelland]

I waited for a professional to reply before responding, because I wanted to be certain.

My reaction, having read your initial post, was to suggest that you seek clarification from your accountant to make sure that you weren't misunderstanding his instructions, which seem nuts on the face of it. If you definitely understood him correctly I know what my next move would be in your position.

 

[Katy1980]

I have an accountant to do my tax return and Ltd co. year end, but I do my own Sage bookkeeping. As I have not come accross the diretors loan situation until now, I just wanted to check that I was making the correct posting... but my accountant seems to want to confuse me unnecessarily... hmmm....!

The worst thing was, when I said (very politely) "oh, I thought whether I did a bank payment or a journal, then the effect would be the same?" my snotty reply was "I am in fact a Sage Trainer. I have been working with Sage product for 13 years now. I have recently sat a exam with Sage themselves and passed with distinction." Wow. I was only asking a question! I think they are just being over the top perhaps... I'm just relieved that my beliefs are not wrong, so that I do not have to doubt my bookkeeping skills! :redface:

 

[David Griffiths]

There is one thing where I would be diametrically opposed to your accountant's standpoint.

If possible, I avoid having clients do journal entries because of the high chance of them getting things the wrong way round. Of course some clients do use them properly and I'm not suggesting that you wouldn't, but the more that they can be avoided the better!

 

[Katy1980]

I couldn't agree with your more. It took me about 5 years to understand that a credit is a payment and a debit is a receipt! My idiot guide (which made me understand it) is:

1) You write a cheque with your right hand (credit) and

2) You take the cheque with your left hand (debit)"

You can't deny, it does work.... lol! :redface:

 

[RAL]

... because of the high chance of them getting things the wrong way round. ...

Agreed. I just had that experience.

 

[MyAccountantOnline]

I couldn't agree with your more. It took me about 5 years to understand that a credit is a payment and a debit is a receipt! My idiot guide (which made me understand it) is:

1) You write a cheque with your right hand (credit) and

2) You take the cheque with your left hand (debit)"

You can't deny, it does work.... lol! :redface:

What happens if your left handed or amidextrous?

 

[Katy1980]

Lol, now YOU are the one being pedantic!

 

[MyAccountantOnline]

Lol, now YOU are the one being pedantic!

I know made me smile though...

 

[David Griffiths]

Lol, now YOU are the one being pedantic!

Not at all. Just covering all bases!

 

[Homshaw]

Hi there

I have just transferred from sole trader to ltd co.

I transferred 5k to the Ltd co. bank account (just so that there was some cash in the bank).

I believe I can post a bank receipt (1200) to the directors loan nominal (2300) and it's all done! But my accountant says I must do it as a journal (but a journal does exactly they same thing doesn't it?) I questioned this, and my accountant said that if I do not do the 5k transaction as a journal, but instead I do it the way I suggested, then it could affect my P&L (but as far as I'm concerned only transactions posted to 4000+ affect P&L...?) Who's right? I am probably wrong because I'm not the professional.... But I want to be sure, because I'm now doubting my Sage ability because of it

Also, I said I would rename 2300 "Loans" to "Directors Loan" and my accountant says I must create a new 2301 code. Why? There's not any point if there are no other forms of loan going through the business... Is my accountant just being pedantic? or am I being stupid?! :|

Just for interest where did he tell you to post the receipt into the bank