Category Archives: Accountancy and bookkeeping

What is a Direct Debit Service User Number?

Direct Debit

Ever thought what Service User Number (SUN)? If you would like to improve your cash flow with a direct debit scheme for small businesses then check out the answer to what is a direct debit Service User number?

Look how your cash flow could benefit from a direct debit scheme aimed at small businesses whether you have a handful of customers or thousands – the scheme I use for my small accountancy practice.

I would appreciate it if you would please mention The Dales Accountancy Service if you contact my scheme provider so that they can monitor where referrals have come from.

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Bookkeeping Entries for Payroll

I am often asked where to enter figures to in bookkeeping software packages in respect of payroll processing.

I will show what entries to make in both KashFlow cloud bookkeeping and Sage. The principles are the same for other bookkeeping software products.

ABC Limited is a pub that has a number of part time staff and the payroll for week 38 was:

Total gross pay (before tax & NI deducted) – £1,233.48

Total tax deducted – £54.60

Total employees National Insurance deducted – £48.90

Total employers’ National Insurance – £56.23

Total net pay (after tax & NI deducted) – £1,129.98

Let’s look at the entries in KashFlow first:

(Note Dr = Debit and Cr = Credit which will be shown on the software when you enter the figures)

Staff salaries (code 7003) Dr £1,233.48 (see note below regarding alternative codes for wages and salaries)

PAYE Control (code 2210) Cr 54.60

PAYE Control (code 2210) Cr 48.90

Net Wages (code 2220) Cr £1,129.98

Employers NI (code 7006) Dr 56.23 (only if £2,000 employers NI allowance used up)

PAYE Control (code 2210) Cr £56.23 (only if £2,000 employers’ NI allowance used up)

Bank payments for wage to employee post to Net Wages (code 2220)

Bank payments to HMRC for PAYE post to PAYE Control (code 2210)

Let’s now look at the entries in Sage:

Gross wages (code 7000) Dr £1,233.48 (see note below regarding alternative codes for wages and salaries)

PAYE (code 2210) Cr 54.60

National Insurance (code 2211) Cr 48.90

Net Wages (code 2220) Cr £1,129.98

Employers NI (code 7006) Dr 56.23 (only if £2,000 employers NI allowance used up)

PAYE (code 2210) Cr £56.23 (only if £2,000 employers’ NI allowance used up)

Bank payments for wage to employee post to Net Wages (code 2220)

Bank payments to HMRC for tax deducted post to PAYE (code 2210)

Bank payments to HMRC for employees NI deducted and employers NI post to National Insurance (code 2211)

Alternative KashFlow codes for gross pay to employees:

For directors use code 7001 (Directors Salaries)

For direct labour use code 6000 (Productive Labour)

Other alternatives are:

Code 7004 – Wages – Casual

Plus, you or your accountant can set up additional codes such as those in Sage below and any specific codes to help you to overview performance and costs.

Alternative Sage codes for gross pay to employees:

For directors use code 7001 (Directors Salaries)

For direct labour use code 6000 (Productive Labour)

Other alternatives are:

Code 7003 – Staff Salaries

Code 7004 – Wages – Regular

Code 7005 – Wages – Casual

It is important to get advice from your accountant as to which codes are most appropriate for your business to use for gross pay. Your accountant can also show you how to enter the figures in your software and produce a wages journal template for you to make it easier and less likely for error.

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Cloud Bookkeeping is the Future

At the Dales Accountancy Service we have adopted online based bookkeeping and payroll software packages in order to provide a more pro-active service to our clients.

Most recently, we have moved to accreditation with an award winning online bookkeeping and payroll software package.

We have now added online bookkeeping and payroll software company KashFlow to our portfolio which enables accountants and their clients to easily access their own financial records at any time, whenever they have access to the internet.

Online bookkeeping and payroll software is considered by many to be the way that the industry is heading because it enables businesses to keep a constant eye on their company’s financial position without having to install costly and bulky software direct onto their computers.

The KashFlow cloud bookkeeping and payroll system is easy to use, with continuous functionality development and we can now talk to clients and update records in real time without having to wait for clients to send in reams of paperwork.

All the records held on the system are stored behind a state of the art encryption system that prevents data from being accessed or passed on without the user’s permission.

KashFlow will now be included on the list of approved cloud bookkeeping and payroll packages for clients and will be recommended to suitable businesses in our growing client base.

We wanted to find a product that was easy to use for our clients that haven’t had any bookkeeping or payroll training, but still enabled us as their accountants to ‘hold their hand’ throughout the year and to extract the information we need to provide a quality service. We’ve found exactly that in KashFlow. The fact that we can access data live over the internet means we can be more pro-active in advising clients and reduce the chance of errors.

KashFlow launched its flagship product, an online tool specifically designed to help owner-managers in small businesses to manage their books, in mid 2005. Since that time it has quickly won a significant share of the valuable bookkeeping software market along with launching a new direct-to accountant division in 2006.

In late 2007 KashFlow won a Business Software Satisfaction Award, judged entirely by customer feedback, for the category of web-based accounting, beating the likes of Sage and Netsuite.

In June 2008, KashFlow became the first bookkeeping software package to be certified by PayPal for integration with its payment platform. PayPal and KashFlow now work in partnership to provide a seamless, end-to-end, payment processing and bookkeeping system.

At the moment, as well as KashFlow, we can support clients using Quickbooks Online, Clearbooks and Sage One as well as desktop versions of Sage, Quickbooks and various other packages.

For further information or to book a free 14 day trial to KashFlow email Glynn Harby (click on Glynn Harby or click on the email envelope below).

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