Default nominal accounts

About default nominal accounts

The default nominal accounts are used to post transactions from all the modules in Sage 200 to the appropriate nominal accounts used for the Profit and Loss and Balance Sheet.

When you first set up Sage 200, you will have to create your nominal accounts and specify the default nominal accounts.

We recommend that you create all your nominal accounts and specify the defaults before processing any transactions in Sage 200.

When you choose your default nominal accounts, the accounts you choose for the Profit and Loss must have a report category Report Type of Profit and Loss, and the Balance sheet accounts must have a report category Report Type of Balance Sheet.

• If you do not enter valid nominal accounts for each default nominal account, this can result in transactions being posted to the Suspense Account.

• You cannot process any transactions until you have set the default Suspense Account.

• If you do not expect to post transactions to a particular default nominal account (such as Discount Allowed), we recommend that you enter the Suspense Account nominal account code, so that none of the default accounts are left blank.

How default nominal accounts are applied

The nominal accounts are used as the default accounts for various accounts and transactions.

The default nominal accounts are used in the following ways in Sage 200:

• The default nominal accounts are automatically displayed when creating accounts (such as bank accounts, customer accounts or supplier accounts), and when entering transactions. If required, you can change the nominal accounts used.

  For example, when you create a new customer account, the Default Sales nominal account is set as the customer's nominal account for sales, but can be changed if required. This nominal account will be used to post the sales values when entering transactions for this customer, and can be changed for individual transactions.

• Transactions are automatically posted to the default nominal accounts, and are not displayed when the transactions are entered. This is usually the case for the Balance Sheet default nominal accounts.

  For example, when you post invoices for suppliers, the transactions are posted to the nominal accounts specified as the Default VAT Input account and Creditors' Control account.

Note: You can only assign a posting type account as a default nominal account.

Manage default nominal accounts

Open: Nominal Ledger > Utilities > Ledger Set Up > Default Nominal Accounts.

Before you begin, you must have created all the nominal accounts that will be specified as your default nominal accounts.

Note: When entering nominal accounts for the first time, you must set the Suspense Account on the Profit & Loss tab and the Accumulated Profit account on the Balance Sheet tab.

Enter the default profit and loss accounts

1. Select the Profit & Loss tab.

2. To enter an account number, click on the Code column for the default account.

   • The nominal accounts you choose for the Profit and Loss must have a report category Report Type of Profit and Loss.

   • You must enter a number for the Suspense Account. Entering numbers for other accounts is optional.

   Note: If you have specified individual nominal account codes for your currencies in the Currency and Exchange Rate Settings, the default nominal account may be overridden when you enter transactions.

3. If you want to use a single specified nominal account for your Discount Allowed and Discount Taken transactions, select Yes from the Use Specified drop-down list.

   Sage 200 will then use this account for all of those types of transactions.

Suspense Account

The Suspense Account is used if the nominal account specified for a transaction or process doesn't exist.

You must set a Suspense Account, as you cannot process transactions until you have set this account.

You cannot change this account on transactions.

Exchange Differences

The Exchange Differences account is used for:

• Currency gain or loss when foreign currency receipts are allocated to invoices.

• The difference between current balance on customer, supplier or bank accounts and the balance after revaluation.

We strongly recommend that you set this account because it's used automatically.

This account is applied to customer sales allocations, supplier purchase allocations, customer account revaluation, supplier account revaluation, and bank account revaluation.

You cannot change this account on transactions.

Bank Charges

The Bank Charges account is used for bank charges added to foreign currency receipts and payments.

This account is applied to nominal payments and receipts, customer payments and receipts, and supplier payments and receipts.

Set this account if you incur bank charges on foreign currency bank transactions.

You can change this account on transactions.

Discount Allowed

The Discount Allowed account is used for the settlement discount amount when it's specified on customer receipts.

We strongly recommend that you set this account because it's used automatically.

This account is applied to customer receipts.

Set this account if you offer your customers a settlement discount.

You cannot change this account on transactions.

Discount Taken

The Discount Taken account is used for the settlement discount amount when it's specified on supplier payments.

We strongly recommend that you set this account because it's used automatically.

This account is applied to supplier payments.

Set this account if you receive settlement discounts from your suppliers.

You cannot change this account on transactions.

Default Sales

The Default Sales account is used for the net value of sales.

This account is applied to sales invoices and credit notes posted directly to the customer accounts, and is used as default for new customer accounts.

Set this account to make sure that sales are always posted to a profit and loss account, and are not posted to the suspense account.

Don't set this account if transactions will be posted to many different accounts and you want to choose the nominal account each time. If you don't set this account, you must either choose a nominal account when creating customer accounts, or choose a nominal account when posting sales transactions.

You can change this account on transactions.

Default Purchases

The Default Purchases account is used for the net value of purchases.

This account is applied to purchase invoices and credit notes posted directly to the supplier accounts, and is used as default for new supplier accounts.

Set this account to make sure that purchases are always posted to a profit and loss account, and are not posted to the suspense account.

Don't set this account if transactions will be posted to many different accounts and you want to choose the nominal account each time. If you don't set this account, you must either choose a nominal account when creating supplier accounts, or choose a nominal account when posting purchases transactions.

You can change this account on transactions.

Bad Debt Write Off

The Bad Debt Write Off account is used when writing off small amounts on customer or supplier accounts.

We strongly recommend that you set this account because it's used automatically.

This account is applied when you write off small amounts (sales), and write off small amounts (purchases).

You cannot change this account on transactions.

Bad Debt Expense

The Bad Debt Expense account is used when writing off bad debts on customer accounts, to reclaim any VAT charged.

We strongly recommend that you set this account because it's used automatically.

This account is applied when you write off bad debt (sales).

You cannot change this account on transactions.

Finance Charges

The Finance Charges account is used when finance charges are applied to overdue invoices for customer accounts.

When finance charges are posted to the Nominal Ledger, this debits the Debtors' Control account and credits the Finance Charge account.

You cannot change this account on transactions.

Stock Issues

The Stock Issues account is used as the default nominal account for Issues when you create a new product group for stock items.

This account is also used as the default Variance account when you enter stocktake values.

You can change this account when you create a stock item or enter a stocktake.

Stock Write Offs

The Stock Write Offs account is applied as the default nominal account when you create a new write off category for stock (in Stock Control Settings).

• If you select a Write off category when you write off stock, the Issues account used for the posting will default to the nominal account set in the write off category.

• If you don't select a Write off category when you write off stock, the Issues account used for the posting will default to the Issues account set for the stock item.

You can change this account on transactions.

Enter the default balance sheet accounts

1. Select the Balance Sheet tab.

2. To enter an account number, click on the Code column for the default account.

   • The nominal accounts you choose for the Balance sheet must have a report category Report Type of Balance Sheet.

   • You must enter a number for the Accumulated Profit account. Entering numbers for other accounts is optional.

3. If you want to use a single specified nominal account for your Creditors' Control and Debtors' Control transactions, select Yes from the Use Specified drop-down list.

   Note: If you choose Yes to use the specified nominal account, you will not be able to use the system setting to Split postings between cost centres for balance sheet accounts.

Creditors' Control

All supplier transactions (purchase ledger) are automatically posted to the Creditors' Control account.

We strongly recommend that you set this account because it's used automatically.

For example, when you post an invoice, the total gross invoice value is credited to the Creditors' Control account. The purchase account for the supplier is debited with the net goods value, and the Default VAT Input account is debited with the VAT amount.

If you always want to use a single specified nominal account as the creditors control account, select Yes from the Use Specified drop-down list. Sage 200 will then use this nominal account for all purchase ledger transactions.

The nominal account used for your purchase ledger transactions depends on whether you have chosen split posting between cost centres for balance sheet accounts in the System Settings for your balance sheet postings and whether you have chosen the Use Specified option.

Debtors' Control

All customer transactions (sales ledger) are automatically posted to the Debtors' Control account.

We strongly recommend that you set this account because it's used automatically.

For example, when you post an invoice, the total invoice value is posted to the Debtors' Control account. The sales account for the customer is credited with the net goods value and the Default VAT Output account is credited with the VAT amount.

You cannot change this account on transactions.

If you always want to use a specified nominal account as the default debtors' control account, select Yes from the Use Specified drop-down list. Sage 200 will then always use this nominal account for all sales ledger transactions.

The nominal account used for your sales ledger transactions depends on whether you have chosen split posting between cost centres for balance sheet accounts in the System Settings for your balance sheet postings and whether you have chosen Use Specified.

Unauthorised Purchases

The Unauthorised Purchases account is a Balance Sheet liability account where unauthorised supplier purchase invoices are posted.

We strongly recommend that you set this account because it's used automatically.

You cannot change this account on transactions.

Bank Account

The Bank Account nominal account is applied as the default nominal Bank account when you create a new bank account.

You can change this account for the bank account and on transactions.

Note: If you create more than one bank account, we advise you to use a separate nominal account for each bank account.

Default VAT Input

The Default VAT Input account is the default Balance Sheet account for input VAT on all supplier purchase transactions. 

This account is applied as the default Input Code for each VAT rate, but it can be changed for each VAT rate. You can select the Default VAT code for individual supplier accounts, so each supplier account will use the VAT input nominal account for their VAT rate.

We strongly recommend that you set this account because it's used automatically.

You can change this account on individual VAT rates. You cannot change this account on transactions.

Default VAT Output

The Default VAT Output account is the default Balance Sheet account for output VAT on all customer sales transactions.

This account is applied as the default Output Code for each VAT rate, but it can be changed for each VAT rate. You can select the Default VAT code for individual customer accounts, so each customer account will use the VAT output nominal account for their VAT rate.

We strongly recommend that you set this account because it's used automatically.

You can change this account on individual customer accounts. You cannot change this account on transactions.

Bad Debt Provision

The Bad Debt Provision account is used for bad debts on customer accounts, to reclaim any VAT charge.

The account is used for nominal postings when you provide for and correct customer bad debt, and write off customer bad debt.

You cannot change this account on transactions.

Prepayments

The Prepayments account is the Balance Sheet account where prepayment The process of deferring expenditure and income to the accounting period in which it is incurred. This usually involves setting up an asset on the Balance Sheet for bills paid in advance, and then releasing that asset by instalments to the accounting periods in which the service is actually provided. journals are posted.

This account is applied as the default Balance sheet account when you create a new prepayment journal, but it can be changed for that journal.

You cannot change this account for the individual transactions for the prepayment journal.

Accruals

The Accruals account is the Balance Sheet account where accrual The process of matching expenditure or income to the accounting period in which it was incurred rather than paid; for instance, a rent cheque or utility charges. journals are posted.

This account is applied as the default Balance sheet account when you create a new accrual journal, but it can be changed for that journal.

You cannot change this account for the individual transactions for the accrual journal.

Accumulated Profit

The Accumulated Profit Balance Sheet account is updated at the year end with the total of your profit and loss nominal accounts (the retained profit).

You must set an account for Accumulated Profit.

This nominal account is where the Year End process puts the sum of the Debit-YTD and Credit-YTD figures from the Profit and Loss accounts before setting them to zero. On the Year End report, the account, cost centre, department and name is shown and the final debit or credit amount calculated by the process.

We recommend that you don't manually post transactions to this account.

You cannot change this account on transactions.

Revaluation Reserve

The Revaluation Reserve account is the account used for posting the total of revalued reserves for either sales or purchases.

Stock

The Stock account is the stock asset account for the Balance Sheet. Transactions are posted when stock items are issued and received, thus affecting the valuation of stock.

The Stock account is used as the default nominal account for Stock when you create a new product group for stock items.

You can change this account when you create a product group or stock item, and also change this account on transactions.

About report categories

The accounts you choose here must have the correct Report Category as this determines whether the are Profit and Loss Accounts or Balance Sheet accounts.

Report categories are used to create your financial statements. They divide your nominal accounts into Profit and Loss or Balance Sheet and then into groups for reporting on the correct section of each financial statement.

It is very important that you make sure your report categories have the correct Report Type (Profit and Loss or Balance Sheet), and correct Category Type (Asset, Liability, Income or Expense). This is because these determine how the value from your nominal accounts are reported on your financial statements. In addition, the values in all Profit and Loss nominal accounts are set to zero, when you move Sage 200 into a new financial year (Year End).