Premium 2011
Setting Up a
New Company
Contents
Steps in the Startup Process
1.
2.
3.
4.
5.
Create company files.
4
Set User Preferences.
6
Change System Defaults.
7
Change Printer Settings.
8
Set up G/L accounts.
9
•
•
•
•
•
6.
7.
8.
9.
10.
11.
3
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Account Types 10
Account Numbering System 12
General Ledger 13
Displaying the Chart of Accounts
Inserting a New Account 17
16
Link modules and accounts.
18
Enter G/L accounts opening balances (history). 20
Set up tax information.
21
Set up vendor and customer subledgers and enter
opening balances (historical transactions).
23
Add credit card information.
26
Set modules to READY. 27
Slideshow 4
The Startup Process
The startup process in Sage
Simply Accounting are the same
whether you are starting a new
company or going through a
conversion process. Conversion
refers to changing the accounting
system from a manual system to a
computerized system or from one
accounting software to a new
software (e.g., from QuickBooks
to Sage Simply Accounting).
Steps in Setting Up a Company
in Simply Accounting:
1.
Create company files.
2.
Set User Preferences Defaults.
3.
Change System defaults.
4.
Change Printer Settings.
At the right are the steps in setting
up a company in Sage Simply
Accounting. Study them carefully.
5.
Set up Chart of Accounts.
6.
Link Modules/Accounts.
Click.
7.
Enter Opening G/L Account Balances.
Each step will be explained in the
slides that follow.
8.
Set up Tax Classes, Codes, Rates &
Customization.
9.
Set Up PAYABLES and RECEIVABLES
Ledgers.
The procedures shown here are to
prepare the COMPANY,
RECEIVABLES and PAYABLES
modules and set them to READY.
You will learn how to set the
PAYROLL and INVENTORY
modules to READY later.
Click to continue.
10. Add Credit Card Information.
11. Set modules to Ready.
Step 1: Create company
files.
This procedure involves setting up
the “skeleton” of the company’s
accounting system. Simply
provides a wizard to walk you
through the setup process. Study
each screen as you go through it.
To start a new company, you
would select Create a new
company after you start Simply.
Click OK.
Study the INTRODUCTION page.
Click the steps of the company
setup at the left panel from top to
bottom on the Introduction page.
Start from NAME & ADDRESS.
Continue to click the next steps.
Study each screen very carefully.
Read the explanation
for each date entry.
By using the BROWSE button, you can specify the location where the new company file will
be stored.
The textbook
will give you step-by-step instructions on how to build a chart of accounts from scratch by
using the last option.
Click FINISH.
Sage Simply Accounting comes with a predefined set of accounts for various types of companies. You
may use one of these company templates.
If you decide to use a Sage Simply Accounting template, you can specify your company ownership
After
settingBy
up choosing
a company
template,
may still
needyou
to add
some
new
accounts,
change
or
structure.
oneaccount
of the Industry
or you
Company
types,
will be
given
a typical
chart
of accounts
rename
others,
or
delete
the
ones
you
will
not
be
using.
for the specified industry or company which you can revise as desired.
Click.
Click File Name next, above at the left panel.
Step 1: Create company
files (continued)
After a few minutes, you will be
presented with a message that
your new company has been
created.
Click.
When you open your new
company, notice that the current
Session Date is set according to
the Earliest Transaction date that
you had set up earlier.
Click to continue.
Step 2: Set User
Preferences Defaults
A default is a pre-set option that is
stored in the Simply system. You
may choose to accept the default or
amend it either by selecting from a
drop-down list provided for the
particular field or inputting your own.
Access User Preferences from the
SETUP menu.
Click USER PREFERENCES.
The VIEW page allows you to
choose the modules for your
company (under PAGES). You may
start with the basic modules and add
more modules later.
You can also choose your language
and terminology options, the way
windows open from the Home
window, and an automatic save
option for records (see bottom left).
You can also select options to
include List buttons in transaction
windows, as well as select the
behaviour of the Print button.
Click to continue.
Accounts
Receivable
Accounts
Payable
Allows you to
perform banking
functions in the
various modules.
Step 3: Change System
Defaults
The next step involves setting up
the Simply work environment.
Simply has set up defaults (pre-set
options), and you can customize
them to suit your needs.
To start the process, you would
click SETUP from the Main Menu,
then click Settings.
Remember that the options on the
MAIN MENU bar apply to ALL
modules.
Click Settings now.
You would then accept or change
the settings according to your
company’s requirements. The text
will give you step-by-step
instructions on the changes you
need to make.
Click to continue.
Step 4: Change Printer
Settings
Depending on your computer lab
setup, you may or may not be able
to change printer settings. Review
this section for information if it
pertains to you.
You can view the current printer
settings by clicking REPORTS &
FORMS from Setup.
Click REPORTS & FORMS now.
At the left panel of the REPORT &
FORM OPTIONS window in Simply
(see arrow above right), you will
find the various documents that
can be printed in Simply. You can
change the printer settings for each
of those documents, if required.
Click.
Click each of the Report Sections
from top to bottom starting from
Report Header and study the
example on the Income Statement
below.
Click to continue.
Step 5: Set up G/L
accounts.
It is best to plan your CHART OF
ACCOUNTS before starting to set
up the General Ledger to ensure
the accuracy of your financial
statements.
First, you need to specify
Account Types. Based on
assigned account types, the
accounts are organized into the
classifications and format you see
at the right.
Click.
Assets, Liabilities and Equity are
section headings and are
automatically assigned by Simply –
you can not change them.
Click.
For each account, you need to
assign an account type. You will
learn more about this in the slides
that follow.
Click to continue.
Section Heading
H
A
S
G
T
Step 4: Set up G/L accounts.
Account Types
(continued)
When determining account types,
identify postable (P) and non-postable
(NP) accounts.
A
H
A
A
Click.
H (Heading) – (NP) starts each section,
providing a description of the section.
A
S
A
A
S
Click.
A (Accumulate) – (P) individual
accounts that need to be totaled. See
balance of each account at the middle
column.
G
H
A
A
A
Click.
G (Group) – (P) accounts that don’t
need to be totaled. Balances are placed
at the right.
Click to continue.
A
S
S (Subtotal) - (NP) The subtotal of all A
accounts is shown at the right column.
A accounts are always followed by S
accounts. Note the A accounts that
correspond to each S account at the
right (colour coded).
Click.
S
H
A
A
S
H
G
Step 4: Set up G/L accounts.
Account Types
(continued)
T (Total) – (NP) accumulates all
the G and S accounts in the
section above it. See right (colour
coded). A T account should
always be preceded by a
Heading (see arrowhead).
S
S
G
Click.
T
Section Totals are automatically
supplied by Simply – you can not
change them. They automatically
accumulate all T accounts in the
corresponding section.
S
Click.
A Section Total is always
preceded by its corresponding
Section Heading (also
automatically supplied by
Simply).
Notice that section headings and
section totals are in ALL
CAPITALS.
G
T
T
S
T
Section Total
G
G
T
S
T
Click to continue.
T
Section Total
Step 4: Set up G/L accounts.
Account Numbering
System
Sage Simply Accounting has predefined numbering for each
account type.
Account numbers can range from
4 to 8 digits in length. Study the
account range and the normal
balance for each type of account
on the right. Regardless of the
account number length, the first
digit represents the Account
Type; e.g., 1 for Assets, 2 for
Liabilities, etc.
It is important for accounts to be
numbered correctly as Simply will
manage input and financial
statement presentation by
account type. For example, a
positive number will be treated as
a debit for an asset account and
will be treated as a credit for a
liability account.
Click to continue.
Simply Numbering System
Account Type
Account No. Range Normal Balance
Assets
1000 – 1999
Liabilities
2000 – 2999
Credit
Equity
3000 – 3999
Credit
Revenue
4000 – 4999
Credit
Expense*
5000 – 5999
Debit
Debit
Step 5: Set up G/L accounts.
General Ledger
To create the Chart of Accounts, add
a new account or revise an existing
account, click the CHART OF
ACCOUNTS drop-down arrow on
the COMPANY Home window, and
then select ADD ACCOUNT (see
right)
Click to continue.
Step 5: Set up G/L accounts.
General Ledger
(continued)
The GENERAL LEDGER window
will appear.
If you are adding a new account,
you would enter the account number
and the account name (see arrow).
These are required fields.
Click.
You would then select the account
TYPE. This example is a GROUP
(G) account.
Click.
Read the explanation for GIFI Code
(see right). GIFI (General Index of
Financial Information) is an index of
items generally found on balance
sheets, income statements, and
statements of retained earnings (for
corporations).
Click the CLASS OPTIONS tab.
This field is used for
electronic filing of
corporate tax returns. The
Canada Revenue Agency
(CRA) uses GIFI Codes to
support their electronic
filing and T2 processing
system. As of the year
2000, all corporations
(except for insurance
corporations) must report
financial statement
information using the GIFI
code.
Step 5: Set up G/L accounts.
General Ledger
(continued)
You would then select the
ACCOUNT CLASS from the dropdown list.
There are no Class Options for
Group Heading, Subgroup Total,
Group Total, and most linked
accounts.
Click the other tabs from left to right
starting from ADDITIONAL INFO and
read the explanation for each.
Click to continue.
You would also skip this page when creating the Chart of
You
would normally
skip thisis
page
when
setting
up
theaChart
of
Accounts.
This information
created
when
you
start
newtofiscal
You
can
add
notes
that
you
want
Accounts.
will learn
about
Reconciliation
& Deposit later in this
year from You
previous
year’s
ending
balances.
display/print
on financial statements.
text..
You can add up to 5 additional lines of description
about the specific account on this page.
Displaying the CHART OF ACCOUNTS
To view the Chart of Accounts after
you have created the G/L accounts,
you would click VIEW ACCOUNTS
on the Company window.
Click.
To print the Chart of Accounts,
select Display Chart of Accounts,
select the Current Year in the
Modify Report window, then click
OK.
Click OK now.
Study the resulting report.
Click to continue.
Inserting a New Account
To insert a new account, be sure to
remember Simply’s numbering
system (see insert right).
Click.
Also remember that the account
should be between the heading (H)
and the T of its account class;
otherwise, if your numbering is not
in logical order, you will not be able
to print financial statements.
Click.
For example, if you are inserting
PREPAID INSURANCE, you would
make sure that it is numbered
between 1001 and 1298. More
correctly, in view of the Order of
Liquidity, it should be between
1220 and 1298. Liquidity refers to
the expectation that the item can be
converted to cash at least close to
its current value within one year.
Accounts are listed in descending
order of liquidity within their
accounting types, with CASH at the
top.
Click to continue.
Step 6: Link modules and
accounts.
You have learned earlier that Simply is
an integrated software. This means that
when you process a transaction in one
module, all other related modules are
automatically updated.
For example, when you make a sale,
Simply will increase the amount your
customer owes you in the corresponding
subsidiary ledger and record the sale,
any sales taxes, freight charges, and
sales discounts, if applicable, in the
general ledger.
When setting up a new company, specify
which accounts should be “talking” to
each other. This procedure is referred to
as linking. If you have used a template,
Simply would have set up the links, but
you still need to review them and make
sure they are correct.
Study the linked accounts in the
GENERAL (Accounts) when you click the
SETTINGS icon. Read the captions in
blue at the top of the bottom window. You
may change the account no./ names,
but not account categories.
Click to continue.
Account Categories
Account No./Names
Step 6: Link modules and
accounts. (continued)
Receivables Linked Accounts
Study the linked accounts in the
RECEIVABLES and PAYABLES
modules. Read the corresponding
notation at the top of each screen
(see arrows).
Click to continue.
Payables Linked Accounts
Step 7: Enter G/L
accounts opening balances
(history).
Until you finish entering history, you
can continue to add, modify, or
delete any items you have set up.
You would enter the number shown
in CURRENT BALANCE (see right)
as the opening balance in the
Chart of Accounts Records page.
Click to continue.
Step 8: Set up tax
information.
The Sales Tax Information window
allows you to record a list of applicable
taxes. You would set up tax information
in the Company Settings window.
Click TAXES at the right panel now.
Notice that for HST (Harmonized Sales
Tax), there is an account to track HST
paid on purchases and a different
account to track HST charged on
sales.
Click.
Entering YES in the Report on Taxes
column will accumulate the HST to be
included in an HST Report.
At the top right, click Tax Codes.
Set Up Tax Information (continued)
Set up tax codes, classes
and rates.
Tax codes allow you to quickly
apply all required taxes at once
(see right). You would then enter
the appropriate tax code in each
vendor and customer subledger.
Simply automatically fills in the tax
codes associated with a specific
customer or vendor on Purchase
and Sales invoices. This avoids
errors and saves time.
Click and study the Purchase invoice.
Click and study the Sales invoice.
If more than one tax code are
associated with some of your
customers or vendors; you need
to choose the applicable tax code
in the purchase/sales invoice.
Simply prints the codes on
invoices so you or the customers
can tell what tax(es) has been
charged.
Click to continue.
Insurance is partially tax-exempt and is charged only 8%
HST. In this example, the tax code HI is applied. Simply
automatically enters HI under TAX and calculates the 8%
HST applicable.
When the customer name is selected, the tax
code specified in the customer subledger is
automatically entered and applicable tax is
calculated.
Step 9A: Set up vendor
and customer subledgers
and enter opening
balances (history).
A vital part of the conversion
process is to create vendors and
customers subledgers, then enter
unpaid invoices. Because the
invoices may be paid individually,
it is best to enter every unpaid
invoice instead of entering the
total balance for the customer or
vendor. This procedure is
discussed in the next slide.
You have learned how to create
customer subledgers (referred to
as Receivables Ledger) in
Chapter 2A and vendor
subledgers (Payables Ledger) in
Chapter 3A. You would use the
same technique for a new
company.
Click to continue.
Step 9A: Set up vendor and customer
subledgers and enter opening
balances (history):
Historical Invoices
You would enter all the vendor
information on the Vendor Ledger by
selecting Add Vendor (see right).
Click.
You would then click the Historical
Transactions tab then the
INVOICES button (see arrows).
Click .
The Historical Invoices window will
appear, ready for you to enter the
specific invoice details, one invoice
at a time. You would use the same
procedure for sales invoices.
Although it is possible to enter all
sales and purchase invoices (paid
and unpaid), it would be less timeconsuming and less confusing if you
enter only unpaid invoices into the
new accounting system, one invoice
at a time.
Click to continue.
Step 9A: Set up vendor and
customer subledgers and enter
opening balances (history):
Verifying Total Opening
Balances
After inputting individual vendor
and customer account balances, it
is important to ensure that
subsidiary ledger totals match
their corresponding control
account totals on the Trial
Balance.
Click.
You can check this by comparing
the total on your Vendor Aged
report with the ACCOUNTS
PAYABLE balance on your Trial
Balance.
Click.
Similarly, the total of the Customer
Aged report has to be equal to the
ACCOUNTS RECEIVABLE
balance in the Trial Balance.
Click to continue.
Step 10: Add credit card
information.
To be able to process credit card
transactions you would set up
information for the specific card
company.
Click.
For Credit Cards Used, you need to
enter the payable account under
Expense Acct to which the purchase
amount you owe the credit card
company and the expense account
to which the credit card charges
should be recorded.
Click.
On the Credit Cards Accepted
page, you would enter the
percentage of Discount Fee.
Remember, as a seller, you would
pay the credit card company a fee for
processing credit card payments you
receive. You also have to define the
expense account to which the
discount fee should be charged and
the asset account to which payment
should be debited.
Click to continue.
Step 11: Set modules to
READY.
After you have entered your records
and their historical information
(invoices, payments, etc.), and have
set up the linked accounts for the
modules you plan to use, you would
select Finish Entering History
from the History menu (see right). If
an error exists,
Click.
a window will appear to inform you
of the error. Simply will not proceed
until the error is corrected.
It is important to back up before
turning the system to READY mode
because once you do, you cannot
go back and enter any other
historical records. In the event that
you realize historical information is
not correct, you can easily restore
from the backup, update the file and
move back into READY mode
without having to start from the
beginning.
You would then be ready to process
transactions for your new company.
Click to continue.
More…
Go back to your text and
proceed from where you have
left off.
Review this slideshow when
you finish the chapter to better
prepare yourself for the next
chapter.
Press ESC now, then click the
EXIT button.
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