Sage 50 Accounts – Chart of Accounts
When you run management accounts in Sage the Chart of Accounts categories your nominal codes. This allows you to analyse your income, expenditure, assets, liabilities, and capital to assess your business performance.
The Chart of Accounts lists all the nominal codes and assigns them to these categories. You can have multiple Chart of Accounts, depending on what information you want to show.
Nominal Codes
Sage uses nominal codes to track sales and purchases etc., such as insurance, or sales. Each code has a unique code, which you can customise to fit your numbering scheme. When you enter a transaction such as sales invoice or a bank payment you need to assign the relevant nominal code.
Default Layout of Accounts
When you first set up your company in Sage 50 Accounts, your nominal accounts and Chart of Accounts are based on the selected business type. Business types include sole trader, partnership, limited company, or charity.
What does the Chart of Accounts consist of?
The Chart of Accounts has two sections – Profit and Loss and Balance Sheet
Depending on where a nominal code is included in the default Chart of Accounts decides on how that nominal code is treated when the yearend routine is run. If a nominal code has been included in the Profit and Loss section, then code is totalled and a reversing entry is entered to bring the balance down to zero. If the nominal code has been included in a Balance Sheet section, then total of the code is just rolled forward at the year end.
Profit and Loss
The Profit and Loss section is split into various categories, Sales, Purchases, Direct Expenses, Overheads and Taxation. In each category you can have as many lines as you want splitting or grouping the nominal codes however you want them. The nominal codes must run together to be grouped and you cannot include one code on another line that is part of a group or your accounts will not balance.
Balance Sheet
The Balance Sheet section again is split into different categories, Fixed Assets, Current Assets, Current Liabilities, Long Term Liabilities and Capital & Reserves. In each category you can have as many lines as you want splitting or grouping the nominal codes however you want them. The nominal codes must run together to be grouped and you cannot include one code on another line that is part of a group or your accounts will not balance. In Current Assets you can have “Floating” Nominal Accounts, these are nominal codes that can be included in Current Assets or Current Liabilities depending on what the balances is e.g. bank accounts whether you are in credit or overdrawn, Sage will show the balance in the correct place i.e. in the Current Assets or Current Liabilities.
