Link Account & Integration P1.

For this tutorial Sage Simply Accounting 2019 Accountant Edition is being used.

If you are a beginner to Sage 50, you might want to allow it to create the chart of account for you and link the accounts for integration purposes automatically. It will work ok except each company is different and needs its own unique and customized chart of accounts.

for how to build a chart of accounts from scratch and  gear it to your company’s needs follow the link below. Otherwise this tutorial is what to do after the chart of accounts has been built.

Accounting Chart

lets get started. drop down the setup menu from the home page and choose settings. this is what you should see.

we are going to integrate these settings into the chart of accounts that you built.

The sections going to be covered are:

Company, General (Account), Vendor & Purchases, Customers & Sales, Payroll, Inventory & Services and last is Departments.

keep in mind that what we do here is not written in stone and can be changed at any given time.

you are already on Company – Information. this section is pretty self explanatory except maybe the fiscal start and end dates.

If you are a Sole Proprietorship or a partnership your start date is when ever you began having transactions and your fiscal year is always December 31. EX: if your first business transaction is April 12, this is considered as the fiscal start date and the fiscal year end is December 31. Your first year will be a short year but the following year will have 12 consecutive months.

If you are a shareholder of a Limited, Crop, or Non-profit, you can choose your fiscal year end.  The fiscal start date is the incorporation date, The date your company is registered with the province and the fiscal end date can not exceed more than 365 days. Ex: is your incorporation date is April 12, than your fiscal end date should be March 31. you can choose a calendar year end, Ex: Dec 31. in this way you will have a short year (April 12 – Dec 31) and the following year will be 12 consecutive months.

Next: click on System.

 

From the top, Cash Basic Accounting. CRA does not look positively on Cash Accounting. This means that if your fiscal year end is December 31 the accounts payable is zero (you don’t owe any money to suppliers) and accounts receivable is zero (your customers don’t owe you any money).

But in reality, and normal course of business you will have accounts payable and receivable balances.

let’s say on December 15 you send out a sales invoice. your customer has 30 days to pay. so, on December 31 this amount is owed to you. and same with your suppliers or utility bills. you might receive the bill in December, but you will pay it in January so at the end of December it will be owed and outstanding to be paid.

CRA wants all sales and expenses to be recorded regardless of whether or not they have been paid.

The rest of this section is your preference if you like to use cheque number or enter transaction in the future. keep in mind you can always change and update these settings.

Next: click on backup

This is the backup options. How often and how to remind you to backup. Its very important to have a regular backup.  Get into the habit of backing up. only takes a few minutes and can save your hard work.

Next: Office 365 Integration

This is a cloud option. It’s the office you know, hosted on the cloud, plus tools to enhance how teams work together and manage your company across devices. this is up to you if you need this option.

 

Next: Features

All the different modules are listed here. you can check off the ones you need. For example if you do not have payroll yet, you can disable the payroll module. the check marks indicated the ones you need for your business.

Next: Payment Processing

here you have the option of choosing Direct Payment (cheques) or EFT Direct (Electronic funds Transfer)

there are standalone companies who work well with Sage and you can register with them to pay your supplier or employees via EFT.

Next: Bank Transactions

This is to connect your bank account through Sage Bank Feed where you can automatically download bank transactions and post entries off of the downloaded transactions. I do not use this option but if you like to use it please let me know how it goes.

 

Next: Credit Cards (Used, Accepted and Processing Service)

Credit Cards Used is the company or your personal credit card setup for ease of recording transactions.

This section is for credit cards accepted. you can also use this section of customers pay via EFT.

This final section of Credit Cards is for Processing Services. This is a stand alone payment processing service that works with Sage and you can register with them.

Next: Sales Tax

This section has been covered and I will give the link below for your convenience.

GST Tax Table Setup

Next: Company Currency

If your company deals in US funds this is where to indicate it.

Next: Forms

Here is a list of all the forms and the numbers that they start with.

 

Next: email

this section is nice because you can choose a small write up that would automatically show up when your sending an email through Sage. click on each section and write up an appropriate dialog pertaining to that section.

Next: Date Format

I like to use the long date format where it shows the month as June instead of a number (06)

it is easier to find documents with the long date format. But this is totally up to you.

Next: Sage Accounting Connection         

this is the cloud connection of Sage.  If your bookkeeper is in another town this system might work for reviewing transactions and financials.

Next: Shippers

This is great for your shipping department. here you can add the most popular shipping companies that you use and include them on the sales invoice. no guessing game how the product will be

Next: Logo

Company logo can be set in this section and it will reflect on your invoice

Next: Names

This is Additional information title. choose your language to appear.

This tutorial concludes the Company section the next part is General (Accounts) section and the link is below.

Linked Accounts & Integration P2

Link Accounts & Integration P3

Thanks for viewing and if there are specific question please drop me a note.

nk.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Bookkeeping you can not ignore

Having and reviewing a financial statement or budget, that tracks your monthly progress, should be a key part of your bookkeeping process. Sit down with your bookkeeper and have them review the financials with you and make suggestions.

Good bookkeeping shouldn’t be just about knowing the day to day activities, it should be about helping you understand where your business is going.

 

Most small business owners and entrepreneurs are masters at creating great products and services, building teams and customer satisfaction, but many will ignore the bookkeeping side of their business.

But if you, the business owner, don’t understand the different types of bookkeeping system your accountant implements to organize your finances, measuring the success (or failure) of your efforts will be lost. By not having a clear financial picture of your business, you risk running into cash flow problems.

For Example:

What do your accounts receivable look like and who owe you money?

 

Are you constantly paying your suppliers late?

 

I worked for a company who thought sales, sales and more sales and they did not sweat the small stuff like bookkeeping and keeping good records.

 

Here are 10 most common types of bookkeeping a small business should know.

 

Cash –  Money coming in and money going out, Very simple.

All of your business transactions pass through the bank account, which is so important that often bookkeepers actually use two journals, Cash Receipts (money coming in) and Cash Disbursements (money going out), to track the activity.

Accounts Receivable – If your company sells products or services and does not collect payment immediately, you have outstanding “receivables” and you must track Accounts Receivable. This is money due to the business from customers less payments made from customers, and keeping it up to date is important to be sure, that you send timely and accurate invoices and monthly statements to collect and keep a healthy cashflow.

 

Inventory – Products you have in stock to sell are like money, because majority of your supplier have been paid, therefore, inventory must be carefully accounted for and tracked. The numbers you have in your books should be periodically tested by doing physical counts of inventory on hand.

 

Accounts Payable – Having a good handle on cash flow makes sending money out of the business less doubtful.  A clear view of everything in your Accounts Payable makes for good bookkeeping and helps assure timely payments and – more importantly – that you don’t pay anyone twice.  On the other hand, Paying bills early may also qualify your business for discounts.

 

Loans Payable – If you have borrowed money to buy items such as equipment, vehicles, furniture or other items for your business, a separate account is setup to tracks what is owed and what is due.  Every payment made towards the load a portion is allocated to the principal and a portion is to interest.

 

Sales – The Sales account is where you track all incoming revenue from what you sell.

This account is all net of taxes. Recording sales in a timely and accurate manner is critical to knowing where your business stands. You can utilize more than one account category if you like to know which item in your inventory sells the most.

 

Purchases –   The Purchases Account is where you track any raw materials or finished goods that you buy for your business. It is a key component of calculating “Cost of Goods Sold” which you subtract from Sales to find your company’s gross profit (the subtotal before overhead expenses and payroll).

 

Payroll Expenses – This is the biggest cost of all for many businesses. In Canada when you hire workers at $25./hr, it does not end there. By the time your business pays its portion of EI, CPP, vacation and WCB this employee may cost your business $27 to $30./hr.

The payroll account must be kept accurate and up to date for meeting tax and other government reporting and remittance. This is helpful for your business as well as for government audits.

 

Owners’ Equity – This account tracks owners investment less the amount withdrawn.

Basically, it tracks the amount each owner puts into the business. “Many small businesses are owned by one person or a group of partners, they’re not incorporated, so no stock shares exist to divide up ownership, instead, money put into the business is tracked in Capital accounts, and any money taken out appears in Drawing accounts. In order to be fair to all owners, your books must carefully record all Owners’ Equity transactions.

 

Retained Earnings – The Retained Earnings account tracks any of your company’s profits that are reinvested in the business and are not paid out to the owners. Retained earnings are cumulative, which means they appear as a running total that has been retained since the company started. Managing this account does not take a lot of time and is important to investors and lenders who want to track how well the company has done over time.

 

Many business owners think of bookkeeping as the last thing to do.  But if you understand and make effective use of the data your bookkeeper collects, bookkeeping can shed light on the health of your business and productive decisions can derive from it.