Show daily income

[Nickinoonoo]

Hi, I work for a care company who invoice service users 4 weekly in arrears, I use sage 50 accounts to create these invoices. The problem I have is the director wants to see how much money is earned daily for each service user, how do I do this in sage when I only have a figure from the invoices that is 4 weekly and in arrears entered on the system.

Any help would be greatly appreciated.

Nicki

[brucedenney]

Take the 4 weekly figure, divide by 28 and that gives you the daily value.

[Nickinoonoo]

Hi, for the daily figure I calculate how do I then show that in Sage 50 accounts as the total figure for the invoice will be shown as one lump sum in arrears when the invoice is raised in the nominal ledger.

For example, if I raise an invoice for the period 13 Aug 12-09 Sep 12 (4 wks) for a total of £400 then £400 will be shown in the sales nominal ledger for September, but not all of the £400 relates to September some related back to August.

My question is what do I need to do to show the figures actually earned in the correct month as the £400 posted to the sales nominal is not a true representation of money earned in the month.

Hope the extra info helps

Nicki

[brucedenney]

Well there are 2 things you need consider.

First some of the income you have shown relates to August as you have already indicated, but also there is some income in September which will not be invoices until October.

This is "Work in progress" WIP, the things you have done, paid for but not yet been paid for yourself.

There are 2 ways to handle WIP the more prudent method is to exclude the expenditure that relates to the income not yet received the other is to add in the income not yet invoiced.

In your case, whilst it is not the best practice, I think that adjusting the income will be much more simple than trying to adjust the income.

The way to do this is to use a control account This account will represent the difference between what you have invoiced in the period and what you should have invoiced for the period.

What you need to do each month is to work out what the income should be.

Assuming your financial year started on 1st March and we are preparing month end accounts for August.

Then my income to date should be 400/27*183 (days in this year) = 2711.11

By actual billing for the period will be either £2800 or £2400 depending on where the billing cycle began (and how much of this years income actually related to last years income)

So to correct this figure I journal an amount to my WIP control account in the balance sheet the amount needed to bring the sales to date to £2711.11 dating it the last day of the current period.

I also post the reversal of this journal, putting the income back into the p&l on the first day of the next period.

In reality, you probably have more than one rental, and that there are periods during which no rent is earned. I suggest you build a spreadsheet that keeps track of all the rooms and the income from them. then have a sheet/section that shows the billing each period and a third sheet/section that calculates the WIP (You can then reconcile this sheet to the accounts to help eliminate errors.

I would work out what the income to date should be for all the rooms and do one journal to cover everything.

[Nickinoonoo]

Thankyou for you swift response-it was along the lines of what I was thinking I had to do.

For the control account for the WIP what nominal account would I be best using?

Thanks again

Nicki

[brucedenney]

I guess because you are always invoicing in arrears this is always going to have an asset value, so it should be in the 11xx area, I would go for 1150