You will need to know how these purchases were paid and enter the payment thru the payment module. The 'bank' will be the shareholder's loan account which is usually acct nbr 2700 and method of payment should be recorded such as S/H Debit Card or S/H Visa or ?? - these can be set up as Credit Cards Used section under Setup -> Settings ->Company->Credit Cards->Credit Cards Used with the Payable account being the 2700-Shareholder loan and nothing in the Expense Account.

This will track how much the owner has been contributing to the business. If and when the owner wishes to be reimbursed from company bank then a chq could be written crediting the bank and debiting the S/H loan account.

If there is an amount in the company bank account then you will need to find out how that money got in there (likely from Shareholder) and record that the same way - debit bank account and credit shareholder loan acct 2700.

What you said  makes perfect sense. I am being told that because there are so many invoices I should add them according to account category, feed in the expense report and then they will pay it through the company. I feel when we print our financials it will make it much harder to track our expenses.

I'm not sure what you mean but guessing it is how to post these invoices? It is of my opinion that every invoice should be entered to its own vendor name no matter how it was paid. Then if one ever needs to look at Joe's Welding Store all you need to do is look it up under that name in Sage 50. Also file it in the file folder under J or Joe's Welding if there is a lot of invoices from this person. I personally would never create a file folder called Auto Expense or Welding Supplies or Office Supplies etc etc as quite often one only knows the name of the company - Canadian Tire - but not what expense was posted. Each invoice would be coded to the account nbr that it is relevant to such as Canadian Tire purchases cold be a mixture of office supplies, shop supplies, and maybe a shelving unit. If one needs to look into office supplies account nbr it would list all the vendors the purchases were made from. Even Petty Cash items are posted to name of supplier and payment made from Petty cash. Replenishments can be made via chq made out to Petty Cash and crediting bank debiting Petty cash account nbr to bring cash amount to the float amount.

Another interesting feature you may not be aware of is if you have a name or an amount you could enter that into the 'Quick Search' on main window of Sage 50 and it will pull up a list of everything that the name or amount is in.

Another point is if you have payments made via shareholder's credit card and payments made via business credit card - both can be set up as Imentined above but use something like MC1234 to set up to business account nbr and MC4567 to set up to shareholder loan acct nbr. Then you will know which card is paying for the item purchased and have it entered into the proper MC account.

They were asking me to not enter the invoices yet. Once an expense report is filled out by the owners which will have the details of the purchases only then I should enter them. I still feel your suggestion of showing the invoices as being paid while crediting a loan from the owners is better. Once they want their money back I can show a payment from our bank account and debit the payable to the owner. I am new at this and I am coming of as being someone who does not know what he is doing. They also want all computers and software to be charged to office supplies expense since it will be considered negligible. Won't it be difficult to keep track of these for texes especially since CRA only allows us to depreciate 55% for computers?

You should post the invoices as of their invoice date - not as of paid date - since you want to show the revenues and the expenses in the month they were incurred in. If the payment date and the purchase date are the same then you could post as a purchase with payment. But if the payment date is later than purchase date then you should post as two separate entries. You have to make sure you are going by the CRA's principles - not the owners - do they have an accountant? If so then talk with the accountant about how to handle the computers.

At this time that I am aware of - computers are still classified as asset and I would suggest softwares to also go into asset - keep the two separated. At year end the accountant will determine the depreciation rate and expense the appropriate depreciation. You may want to use this link as a guide for further information you may require.

www.bookkeeping-essentials.com

You are right. I should not get more into it for now. Right now what I have in front of me is a sales order for services that are supposed to last a year. The monthly invoices we are creating are the exact same but after multiplying by 12 the total amount is close but will not match the total of the purchase order. Should I skip entering a sales order and only enter the invoices? The customer is given 90 days for payment so we will expect our first payment soon.

I'm not sure what you mean by sales order x 12 not quite the same as purchase order.

It sounds like you are creating a sales order or an invoice for annual service to a customer and the supplier or vendor is providing this service for you at same cost as per the purchase order?

Or did you rally mean sales order when you said purchase order?

I am sorry for the confusion. We received a purchase order from our client for services that will last the entire year. The last few months my business has been invoicing them monthly referring to the same purchase order number. The monthly invoices amounts are the same so if I multiply one invoice by 12 it should equal the purchase order from the client but in this case it does not.  

ok - that is no problem, in general when an annual amount does not divide evenly into 12 equal amounts then either the first invoice or the last invoice will be an amount that brings it to the total annual amount.

Example is 1240.00 annual is 103.33 per month for 11 months and then the first or last month is invoiced at 103.37.

Thank you! It's not an issue with decimals. It's a difference of $860. But that I can ask the owners about it later. When entering a purchase order from a customer is there a way for me to avoid entering back orders? We are providing a service not an item. What is the back order feature used for? When I later enter a monthly invoice I want to be able to refer to the PO but not claim the entire amount.  

Also feel free to tell me to stop bothering you since I have already taken so much of your time.

No problem - unfortunately I am not very familiar with inventory module. Perhap someone else can help you with this section.

so you provide services to customers - are these services setup a 'service inventory items'

do you need a PO because you purchase the service from a third party that you resell to your customer ?

crbookkeeping - just to update you - the PO that is referred to is the customer's PO - so it would be a sales order at this end.

We provide consulting services. We received a purchase order for 190,500. The consulting service will last for 11 months. We invoice the client every month. How do I enter the the purchase order without entering the the quantity number. When I want to create a monthly invoice referring to the PO it puts in the full amount.

not sure if this will work since I am not familiar with inventory module but perhaps the quantity could be the months - so it would be 11 for qty and you are billing out 1 at a time. This also lets you know how many months are left to bill out.

I am sorry for bothering you smithco. I thought I was asking the person you referred me to. The problem with the invoices is that they are not the same amounts so I cannot divide the purchase order into 11 units.

are you entering the customer PO into Sage as a sales order?

if so, you can enter a qty ordered/backordered of 11, allowing you to create 11 invoices where the qty shipped is 1, causing the backorder qty to go from 11 - 10 - 9,,,,-  0

the invoice that causes the b/o qty to become will remove the sales order from the system

if it's not divided evenly by 11, is the customer PO based on x hours at a rate of y$ ?

if so, the sage sales order qty is #hours, and the price is the $rate

again, each month you invoice the #hours provided, until the b/o qty becomes 0

if it's not divided evenly by 11, is the customer PO based on x hours at a rate of y$ ?

if so, the sage sales order qty is #hours, and the price is the $rate

again, each month you invoice the #hours provided, until the b/o qty becomes 0