Quick Start Guide Accounting Entries. January 2014

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1 Quick Start Guide Accounting Entries January 2014

2 Quick Start Guide Accounting Entries This document is a guideline to use when determining how you as a merchant could generate accounting entries. Please note that it is only a guide and is used at your own discretion. 1.1 Transaction Types and Associated General Ledger Transactions There are five types of transactions which can occur on your Sage Pay account. These transactions are listed on page 3, with a brief description to each, and the general ledger double entry associated with each transaction. 1.2 Accounting entries The possible accounting entries that you may want to generate from these transactions types, together with a recommended GL Account will be illustrated in this document. In our suggested accounting setup it is imperative that you set up your Sage Pay account as a Bank Account and as such reconcile it as you would any other bank account. A detailed Sage Pay Statement is available on the system for reconciliation purposes. 1.3 General Ledger Account list A recommended chart of accounts to use for the Sage Pay related transaction would be as follows: Sage Pay cashbook. We suggest that you set up this in the cashbook and treat it as a bank account as it is in effect a Cash account. This will enable you to transact against your Accounts Receivable and Accounts Payable sub-ledgers. Accounts Receivable. Setup a sub-ledger for each of your client/s. Income account to reflect the relevant income for which you are debiting. Bank account which is your bank account registered with Sage Pay. Fees account for fees charged by Sage Pay. Accounts Payable sub-ledger for each one of your creditors. 1.4 Transaction types and Associated General Ledger Transactions Set out, on the top of page four, is a typical Sage Pay Statement that will be found on the Sage Pay system. Following the statement, are the standard accounting transactions we recommend for each transaction type. A T-account general ledger illustrates the transactions using the values indicated in the provided Sage Pay statement. In conclusion, we trust will assist you with questions you may have regarding accounting entries. If there are any other accounting related queries, they can be directed to gary.soothill@sagepay.co.za or contact our accounts department on Quick Start Guide: Accounting Entries Page 2 of 5

3 1.5 Transaction types and Associated General Ledger Transactions orders These are debit orders which you load onto the Sage Pay system to collect funds from clients. Raise the debtors in the Account Receivable sub-ledger prior to generating the debit order file Income (relevant income account per business) Raise a virtual receipt transaction for the actual value of the debit order in the Sage Pay Cashbook, which will zero out the various debit order clients. The balance will now reflect the expected asset prior to fees. Service Fees These are pre-determined and agreed fees for transactions processed on your behalf on the Sage Pay system. This transaction raises the fees payable to Sage Pay. This decreases the expected gross debit orders and now reflects the net money receivable from Sage Pay. The fee expense is also accounted for. This transaction can be obtained from your statement obtainable from the Sage Pay website. Sage Pay Fees expense Receipt/Bank Transfer Payment by Sage Pay to the merchant, of funds available of debit orders collected on their behalf. This transaction represents funds in the Sage Pay account less any retentions, having already taken into account fees and unpaid transactions. Unpaid Bank account order submitted by the merchant which have not been honoured (e.g. insufficient funds, account closed, etc) This transaction represents any unpaid debit orders for various reasons, run against debtors. Again this will decrease the value of the final amount owing to you by Sage Pay. Quick Start Guide: Accounting Entries Page 3 of 5

4 or Payments Your creditors are paid according to data uploaded and released by you onto the Sage Pay system. Raise the creditors in the Account Payable sub-ledger prior to generating the payment file Expense (relevant expense account per business) Accounts Payable (per creditor) Raise the payment of creditors when you upload the payments onto the Sage Pay system. These payments can be made against funds available in your Sage Pay account. Accounts Payable (per creditor) Funds Transfer to Sage Pay Transfer of funds to Sage Pay to have funds available for or Payments service via the Sage Pay System. Transfer of funds to Sage Pay for or Payments. Statement Example Sage Pay account Bank Account Sage Pay Merchant Statement Merchant :Sage Pay Statement Date Type Description (-) (+) Balance 01-Jan-06 Opening Balance Jan-06 (1) Upload Bank Transfer , , Jan-06 (3) Receipt Batch for 200, , Jan-06 (2) Service Fee Transaction Fees 1, , Jan-06 (5) or Payment Batch for , , Payment 04-Jan-06 (4) Unpaid John Smith - Unpaid debit order 2, , Feb-06 (3) Receipt 04-Feb-06 (6) Funds Transfer 04-Feb Jan-06 Bank Transfer , Closing Balance 0.00 Quick Start Guide: Accounting Entries Page 4 of 5

5 General Ledger Example Accounts Receivable order clients 03/01/06 Income at 3/1/ /01/06 orders loaded onto Sage Pay system 04/01/06 John Smith - Unpaid debit order /01/06 orders loaded onto Sage Pay system /01/06 Sage Pay fees on debit orders 03/01/06 First payment from Netcash /01/06 or Payments /01/06 John Smith - Unpaid debit order 03/02/06 Second payment from Sage Netcash 03/01/06 First payment from Sage Pay /02/06 Second payment from Sage Pay XYZ Bank Account Client support contract (income account) 03/01/06 Income at 3/1/ /01/06 Sage Pay fees on debit orders Fees Sage Pay 04/01/06 or Payments Accounts Payable (Company creditors) In conclusion, we trust will assist you with questions you may have regarding accounting entries. If there are any other accounting related queries, they can be directed to gary.soothill@sagepay.co.za or contact our accounts department on Quick Start Guide: Accounting Entries Page 5 of 5