What is a Nominal Code in Sage 50 Accounts
What are nominal codes? The Nominal codes (Nominal Code in Sage 50) are those codes that are used within the chart of accounts. These are mainly used to record income and expenditure. Accounting software also comprises a standard set of codes and most people do not change them. Nevertheless, codes can be customized and although they are generally four digits, they can also be up to eight digits. Using the nominal codes also makes it easy for businesses and accountants to see the type of financial transactions that have been made and to be able to file any reports for the financial year. There are certain businesses that never look at the codes themselves and focus mainly on the category name instead.
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Read More : How to Record Loan in Sage 50
Create and Manage Nominal Accounts
The transactions that are entered within Sage 50 Accounts have been assigned to nominal codes. These records mainly represent the different types of income, expenditure, assets and liabilities for your businesses. With in the Sage Accounts these are known collectively as the nominal ledger. In case you are new to Sage Accounts you might know this as the general ledger.
The nominal ledger is based on the type of business you have selected within the Active Setup wizard when you first set up your company. If needed , you can easily rename the nominal codes and create new ones as well. If you do this, you should also make sure that your new code has been correctly defined within the chart of accounts.
Resolution
In order to view your nominal codes you need to:
- Go to Nominal codes
- Now select the List radio button.
Basically, the nominal ledger is simply a list of records. An additional area also known as the chart of accounts defines the type of account each nominal code is, for example, sales or purchases.
If needed, you can easily rename nominal codes and create new ones as well. In case you do this, you need to also make sure that your new code is correctly defined within the chart of accounts.
TIP: The way nominal code values are used by the Profit and Loss and Balance Sheet reports is controlled by the Chart of Accounts (COA).
Also Read : How to Set Up New Bank Account in Sage 50
Final Words
Sage 50 nominal codes are basically numeric and can be up to 8 digits long. Also there are relatively fewer restrictions on how these are utilized. It is entirely possible to use one of the Sage supplied templates, at least in case you are a smaller and simpler business or charity. Even if you have to use one of the Sage template “chart of accounts”, though, you are most likely to want to make some changes – if only to change the nominal account names such as “Sales Type A” to something more meaningful to you.
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Frequently Asked Questions (FAQs)
Give an Example of a Nominal Code?
One simple example is that you would have one nominal code for ‘Hotels’ and another for ‘stationary’. For example if you stayed in a hotel you would assign that expenditure the specific ‘hotel’ nominal code within your accounts, and if you bought some stationary for the office then that would be assigned as the ‘stationary’ nominal code.
What is Meant by the Nominal Code 7000 in Sage?
The nominal code 7000 are optional codes that one can use to split their gross wages into subcategories. The examples in this article use nominal code 7000 for gross wages for simplicity. This Depends on the reasons for the deduction, it can also be classed as an overhead.
What is Meant by Nominal Code 1235 in Sage?
This means the cash register bank account, 1235 by default. After the user has posted transactions to this bank account you can not change this setting. The Bank Reconciliation is also disabled for this account and can not be amended. Also the default nominal code for till sales is initially set to 4000.
