Sage 50 Payroll – set up the Nominal Link
As with everything in connection with payroll, the person(s) running payroll is always very conscious that it is people lives and the business that are affected by their actions. Not wanting to get anything wrong, they will often stick to what has always be done, because they know it works, so why change – well efficiently for one, time saving, reduction of stress – all excellent reasons – so read on.
Below are some of the reasons that I have heard over the years for why businesses don’t use the Sage 50 Payroll function to automatically update the accounting package with the payroll journal.
Use the payroll nominal link – Why wouldn’t you?
Why would you not want to have Sage 50 Payroll post the wages and salary journal into your accounting system, rather than taking time to prepare a manual journal and then entering that journal each week/month into the accounting system, there has to be a better method.
- We only use the Sage 50 Payroll, we don’t use a Sage package for our accounts.
- Don’t know how to set it up.
- It takes too long to set-up.
- We have a very detailed nominal ledger and we can’t get the detail required.
- Management don’t trust the system to automatically update the accounts package.
- Payroll is on a standard alone machine.
- The person responsible for payroll doesn’t have access to the accounts.
- Simply we just don’t have the time to set it up.
Ok, so let’s take a look at these excuses, (Whoops, I meant reasons)
We don’t use a Sage Accounting package for our accounts. Sage 50 Payroll does links to Sage 50, Sage 200 and Sage Instant true, however it does also link to other accounting packages directly, admittedly limited to TASBooks, however, more importantly it does have the ability to produce the nominal journal in the form of a file that could then be exported/imported into any accounting system. You can specify the style of the format suitable for your accounting system requires. Whether your system require CSV files, Excel, XML, the ability to save the file as Plain text or PDF as well, so very versatile. The vast majority of accounting systems have the options to import files.
Don’t know how to set it up. We don’t know how to set it up, it looks far too complicated. My usual answer to this is along the lines of, who prepares the manual journal that it is currently used to process the payroll to the accounts, because this is where the answer lays. Either the journal is set up as a template and the numbers are just punched in manually each time, or the whole journal is manually keyed every time. Just populate the static part of the “journal” directly into the Sage 50 Payroll.
It takes too long to set-up. Tactfully, I ask how long does it take to complete the salary journal currently, then I suggest that to setup the nominal link takes no longer than to create the manual journal just once. Once it is created it becomes just another button to select when processing the payroll routine, it really is that simple.
We can’t get the detail required. When clients say this to me, I ask how is the payroll set up, what is the nominal structure? Sage 50 Payroll allows for the posting to a nominal code, cost centre and department, of course not everyone uses cost centres and department but that is fine, you do not have to. Beyond this every department or cost centre can post to a different range of nominal codes.
Using an example of Sage 200 where there are department and cost centres.
i.e. Department = Factory which is located on 3 different sites.
Basic factory in the South, wages – 44100, SOU, FAC.
Basic factory in the North, wages – 44100, NOR, FAC.
Basic factory in the East, wages – 44100, EST, FAC.
Overtime in the South – 44200, SOU, FAC
Overtime in the North – 44200, NOR, FAC
Overtime in the East – 44200, EST, FAC
Every department or cost centre can be processed to a different combination of codes. In addition, every different pay type or deduction type within the department can have an override applied to different nominal, it is also possible to process Pension contributions and Employer NI contributions to different nominal codes. In addition or instead of using departments and cost centres, each payment/deduction/pension type can be posted directly to different nominal codes. So, the link can be a detailed as required.
Don’t trust the system to automatically update the accounts package. Understandable, lots of individuals and business don’t like the idea of anything happening automatically, it’s that feeling of not being in control, however, the Sage 50 Payroll link does need your involvement, as part of the process of running the payroll, once the actually payroll has been completed, the option to process the Nominal Link is run, at this point you have the opportunity to review what the postings are going to occur. The ability to run a double check, you can preview the full details or export it to excel.
The system then provides two options to either post everything in full detail to the nominal ledger i.e. all individual transactions listed in the payroll are posted to the Nominal ledger, some might want/need this detail in the nominal ledger, however the most popular alternative is to post the transactions as a group, this summarises the postings to the nominal ledger only posting one figure to each nominal code. You control when the journal is actually processed.
Payroll is on a standard alone machine. If the payroll is completely standalone and does not have access to the server, which I suggest these days is unusual, the option can still be used, simply save as a file, that can then be transferred to the server where the accounting system is held and imported.
The person responsible for payroll doesn’t have access to the accounts. The individual who is running the Nominal link in Sage 50 Payroll does need access purely to logon on to Sage 50 or Sage 200. They do not however need to be able to access the program in its entirety. Some clients have that one individual running the payroll and then the accounts manager logs on to Payroll purely just to complete the Nominal link.
I just don’t have the time to set the nominal link up. This come back to previous comment, “It takes too long to setup”, Yes it does takes time to setup the link up fully, but no longer than it take to create the journal in the first place. So, if you already have the journal or a template, you are simply coping the journal and entering directly into Sage Payroll.
If you want advice or assistance in setting up the Nominal link or Payroll in general then K Consultants are here to help, we are based just south of Bedford, on the borders of Herts, Bucks, Northants and Cambs, however we have covered projects from Poole & Southampton in the south, up as far as Edinburgh and Glasgow. Cardiff through to Fakenham on the East coast and even a couple of sites in Paris! – We always aiming to deliver exactly what you need and require to help your business flourish and run efficiently.
We’re the experts that give you time to run your business, just call K Consultants, email us or fill in the details on our contact form and we will get in touch – see how we can make your work life more productive!