Processing Furlough Pay In Sage 50
It's a bit complicated ...
Posted by Alison Mead on 13/04/2020 @ 8:00AM
I am about to run my first Sage 50 payroll, processing furlough pay for employees as I have a client who pays their staff in the middle of every month. I felt that it would be a good time to write a blog post about it ...
Processing furlough pay in Sage 50 needs its own payment type!
copyright: olegdudko / 123rf
Having had a chat with the client's accountant, we decided it would make the reporting much easier if we add a new Payment Type in the software when processing furlough pay. It still needs to be used in the calculation of PAYE, National Insurance and counted in your Pension calculations.
It means we can easily produce a report showing the furlough pay ready for when we can claim this back from HMRC. I will pay 80% pay through this payment type and leave 20% going through as normal wages. My client is topping up wages for their staff to normal levels.
Unfortunately for me, I had already processed March's payroll with normal pay for all, done my P60s and closed the payroll. We decided that it's not worth all the hassle of rolling this back just to change the pay in this case.
"I need to remember to add March's furlough pay to my
reports when I produce them!"
This is an unprecedented time for all of us who work as bookkeepers and accountants and process pay for others. For a while at least, the information was changing daily on what could or could not be claimed, and for the time being, companies need to pay staff not really knowing when or how we can reclaim from HMRC.
My advice is to use the HMRC website to double-check anything you read and seek support if you are confused on what to do. Another bit of advice I'm giving clients is not to pay your VAT if you don't have to, even if you can afford to.
As the furlough pay will take a while to come through, I am recommending clients use the money they have saved from their VAT return to pay their staff, then when the furlough pay is finally claimed they can use that money to set aside to cover their VAT bill.
Many people don't want to be in debt to the HMRC, but this seems a sensible and prudent way to help with processing furlough pay and to manage your cashflow if you can.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more, it may be a great idea to give me a call on 01604 217365 and let's see how I can help you.
About Alison Mead ...
Alison loves bookkeeping and supporting bookkeepers. She has been helping clients to be better bookkeepers in Sage 50 for over 24 years and has been Xero Accredited in accounts and payroll for a number of years too.
She specialises in a very unique hand-holding method of training, helping bookkeepers and business owners to use their accounts software as and when they need support in setting up and producing their invoices, reports and financial information.
Alison combines her role at Silicon Bullet with her Forever Living network marketing businesses and is often to be seen at business networking meetings as she likes to keep busy.
You know what they say: if you want something done well ask a busy person!
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