New Nominal Code Categories

[suzyg09]

I need to set up a nominal code for Unbilled Hours which will be used for hours when painters/decorators cannot work because of wet weather. I was thinking of using 7015 but am not sure about the Type and Category. I think a Direct Expense would be something you purchase but I wouldn't have thought the decorators were an Overhead as they make money for the company? Category: Gross Wages?

I've been looking at a Chart of Accounts printed from the internet. How would it affect the accounts if I were to use, just for example, 8200? Also, how important is to to get the type and category correct?

Setting up a nominal code for advertising, would Type be Overheads, Category - General Expenses?

Look forward to your help.

[Site4]

If you set up new COA using the one you print out from t'internet, you won't harm anything, COA is just for reporting purposes.

Before we establish where your unbilled hours go we need to establish what they relate to. Are they bought in services or payroll costs? If they are payroll costs, you need to find out where your billable hours go - it'll usually be 6xxx or 70xxx. These need to go in the same area. Check normal time to see what type and category is used. If we're talking bought in, it could be anything, but 5xxx would be a good guess. It needs to be posted to the same area as your bought in labour costs.

As for advertising - do you not already have 8300 set up?

[suzyg09]

Thanks very much for your reply. The unbilled hours are payroll costs which go to 7004. I'd like to be able to see what type and category have been used for the nominal codes already set up but I don't understand what you mean by "check normal time".

With regards to advertising, all nominal codes were set up before I started working for the company in March. The nominals for advertising are 6201 Yellow Pages, 6202 Local Newspapers, 6203 P.R. (Literature and Brochures). Are these in the wrong area? Nothing is set up in the 8000 area but we need to set up a nominal for advertising on the internet.

[Site4]

Sorry, by "normal time" I mean whatever code the normal wage costs are billed to - if unbilled are going to 7004 it's a good chance that the main code for wages is 7000. To see how the COA is laid out and what types and categories are used, go to Company, Nominal Ledger, COA, and select the chart of accounts in use. You'll see Types on the left and categories on the right - you just have to rummage around until you see which combination covers the nominal code you're looking for.

As for your advertising codes, no they're not wrong. Some people treat advertising as an overhead and others as a direct cost - it's usually to do with whether how important advertising seen as in terms of generating business. If all that type of expense is lurking in the 62xx range, just use the next number up.