pastel version 5 (p5w) module one - tripod.comishmaelchibvuri.tripod.com/pastelbook.pdf · pastel...

Pastel Version 5 (P5W) MODULE ONE

[email protected] Page Pastel Notes 2008 1

1.1 INTRODUCTION Welcome to Pastel Partner, THE POWER OF INFORMATION Pastel Partner is a Windows-based, user-friendly, fully comprehensive, fully integrated accounting package. It includes an inventory and invoicing system, which is fully integrated with Customer, Supplier and Inventory Control systems. A fully integrated inventory system means that the cost of sales journal entries will be calculated by the system. A partially integrated inventory system means that these journals have to be done manually at each month end. (Pastel can be run as a partially integrated system.). For the purpose of this course, you are going to process two months’ transactions. In the first month you will be running without live invoicing. That is, you will assume that your business either types the invoices on another system or writes them out manually. Only the invoice totals will be recorded. No inventory movement will be recorded. You will create customers and suppliers and process transactions through the sales and purchases journals. You will then go to the cash book and record cash purchases and sales, as well as record receipts from customers and payments to suppliers. Once the cashbook has been completed, you will be required to reconcile it. Petty cash entries will then be put through the books. Lastly, the month-end reports will be printed. In the processing of the second month’s transactions, you will be taught how to invoice through Pastel. This means that you will add stock items to the system and invoice out and purchase stock. Inventory movement will be controlled. This course assumes that you are to work in the Windows environment, and that you are comfortable using a mouse. This course will give you practice in using all the day-to-day routines in Pastel. Pastel Partner is capable of running as a batch system or as a real-time system. We will be running Pastel Partner as a batch system during course. (The real-time method will be discussed during this course.) This means that all transactions are entered into a batch before they are updated to the ledgers. This enables you to edit or correct any transaction Pastel posts it and updates the ledgers. This makes Pastel very forgiving, so do not worry about making mistakes. If in doubt, ask the Training Adviser to check your batches before you update to the ledger. 1.2 THE RULES OF DEBIT AND CREDIT (DOUBLE ENTRY) It has been said that there are as many bookkeeping systems as there are businesses. This is because each business has its own unique systems and trading style. The common denominator in all bookkeeping systems is the DOUBLE ENTRY system. It is around this system that Pastel Partner has been designed. The basic principle of double entry is that for every debit there must be a credit. Pastel Partner uses this principle. 1. a. People who owe the company money are called Customers (Debtors). To increase the customers account, the amount that is owed must be debited to the Customer account must be credited.



b. If the Customer account is to be reduced (Payments, Credit Notes on goods returned, etc), then the customer account must be credited. 2. a. People to whom the company owes money are called Suppliers (Creditors). To increase the Supplier account, the amount owed by the business must credited to the Supplier account. b. If the Supplier account is to be reduced (Payment, Credit Notes on returns to supplier, etc), then the Supplier account must be debited. 3. All expenses and losses must be debited to the relevant expense or loss account. 4. All income must be credited to the relevant income accounts. 5. All assets (stock is regarded as an asset) acquired by the company must be debited to the relevant asset account. 6. All liabilities must be credited to the relevant liability account. 7. a. All money deposited into the company’s Bank Account must be debited to that account. b. All money withdrawn from the company’s Bank Account must be credited to that account. 1.3 CHARACTERISTICS OF PASTEL PARTNER Pastel Partner is ideally suited to the accounting needs of small to middle-sized businesses. Pastel Partner’s method of working is based on a batch processing system. All input is first typed into a batch of transactions, and then posted to the ledger. This is basically the same method as that used in a manual system, where transactions are first written up in the journals, and then posted to the ledger. Pastel Partner uses the principle of Double Entry mentioned on the previous page. All transactions are recorded from the source documents in the books of prime entry (subsidiary journals, sometimes-called entry types). From there, they are posted to the various ledger accounts. A trial balance, made up of the balances of the ledger accounts, will automatically be made available. The following is a list of the SUBSIDIARY JOURNALS, from which all transactions are imported, depending on the nature of the source documents: 1. RECEIPTS CASHBOOK (Cash Receipts Journal) records transactions from receipt books, cash register rolls and bank deposit slips. 2. PAYMENTS CASHBOOK (Cash Payments Journal) records all cheque stubs and direct debits and service fees from your bank statement. 3. SALES JOURNAL (Customer Journal) records all sales transactions where services are rendered on credit and detailed in invoice books. 4. PURCHASES JOURNAL (Suppliers Journal) records all purchase transactions involving expenses incurred in a particular month, but paid for in the following month, e.g. stock bought on credit, stationery bought on credit, rental, telephone and fax expenses not paid for in the month during which the debt was incurred. These transactions are recorded on invoices received from other persons/businesses. 5. PETTY CASH PAYMENTS/RECEIPTS JOURNAL is used to record all transactions of cash paid by the business, or of cash received into petty cash which are detailed on petty cash slips/vouchers. 6. GENERAL JOURNAL is used for all transactions, which cannot be imported into any of the above subsidiary journals. This includes transactions such as corrections of errors, adjustments, closing entries, etc. 7. SALES AND PURCHASE CREDIT NOTE JOURNALS record returns from customers or suppliers. These transactions can be recorded in the purchases or sales journals, or in a separate return journal.



8. DEBTOR’S INTEREST JOURNAL records interest charged on overdue customer accounts. 9. SETTLEMENT DISCOUNTS ALLOWED OR RECEIVED are handled in the Cash Receipts or Payments journal. (This will be demonstrated during the course FINANCIAL STATEMENTS Pastel Partner can be used for drawing up the financial statements of the business. Many standard reports are available. The Report Writer can be used to draw up customized reports, i.e., customized annual financial statements. After the parameters of the statements have been set up, finalization of the statements follows automatically each year, using the same principles as the manual method of drafting financial statements. 1. 4 WHY COMPUTERIZE YOUR ACCOUNTS? There are numerous factors to be considered before computerizing the books of a business. The main advantage in computerizing the bookkeeping functions of a business is speed and efficiency. The steps involved in the accounting process can be carried out much faster by a microcomputer. The user of the computerized accounting results is also ensured of a more accurate reflection of the financial position of the business, as many of the processes are programmed into the computer beforehand. These processes are therefore executed without error. VALUE ADDED TAX (VAT) One main reason for wanting to computerize your accounts is Value Added Tax (VAT). VAT is a tax that is charged on just about every transaction in South Africa. The Receiver of Revenue requires detailed proof of all VAT paid and received before allocating tax credits. Furthermore, the onus of proof of payment/receipt is on your business, and not on your supplier/customer. Stiff fines and penalties are payable where these requirements are not met. VALUE ADDED TAX (VAT) One main reason for wanting to computerize your accounts is Value Added Tax (VAT). VAT is tax that is charged on just about every transaction in South Africa. The Receiver of Revenue requires detailed proof of all VAT paid and received before allocating tax credits. Furthermore, the onus of proof of payment/receipt.) is on your business, and not on your supplier/customer. Stiff fines and penalties are payable where these requirements are not met. AVAILABILITY OF INFORMATION Another reason for computerizing your accounts is that in a tight economy, business people need up-to-date information. In the past this information was usually available only from an auditor. With the accessibility of computers and sophicated computer programs, it is now possible for the small business to have similar accounting information to that of very large corporations. CONTROL OF CUSTOMERS Yet another reason to computerize your business is the high cost of unpaid customer accounts. Very often, manual systems are too cumbersome to able to analyze accurately by how many days customer accounts are overdue. It is also difficult to charge interest on a manual debtors system as each customer must be individually traced and debited. In simple terms – computerizing your accounts gives your small to medium business accounting system.



IN SHORT: A computerized accounting system gives you what Pastel calls: “The power of Information.” 1.4 STEPS TO FOLLOW WHEN COMPUTERIZING YOUR BUSINESS A SUMMARY The following seven steps should be followed when computerizing your accounts: 1. Create an accounting specification. 2. Organize your business around your computer’s requirements. 3. Determine your accounts structure. 4. Determine your VAT reporting needs. 5. Take on your opening balances. 6. Run your manual and computerized accounts side-by-side for a period. 7. Phase out your manual system. BEFORE YOU BEGIN The following information is necessary before making a start on computerizing the accounts: • The business name, address, telephone and fax numbers. • The number of periods per financial year, and month-end dates. • The various subsidiary journals in use. • A trial balance as at the date of implementation. • The names, addresses and details of customers and suppliers. • An age analysis of customers and suppliers on the implementation date. • A list of services rendered by the business as well as a list of stock items sold by the business. • A set of annual financial statements for the previous year. • A cash book reconciliation for the month prior to the date of implementation registration information for VAT purposes. This course is intended to teach students how to use the Pastel Partner program. It is not intended to replace the services of a qualified accountant. Should you have any querries regarding the accounting requirements of your business form, please consult the relevant experts.



1.5.1 CREATE AN ACCOUNTING SPECIFICATION ANALYZE YOUR BUSINESS Before you begin to computerize, identify your main type of business. • If your business is mainly service-oriented, your accounting requirements will differ considerably from those of a trading business. In general, the needs of a service enterprise are more simple than those of a trading business. This is because trading enterprises need to account for the inventory (stock) that they carry. The cost of carrying inventory (stock) can be minimized to a large extent by accurate inventory reporting. A service business may implement inventory codes for particular types of service. For example, an appliance repair business may have differing rates for different types of repair. The rate for television repair may, for example, be substantially higher than stove repair. • If your enterprise is a combination of both services and trading stock, then the profitability of each can be analyzed. 1.5.2 ORGANIZE YOUR BUSINESS AROUND THE REQUIREMENTS OF THE COMPUTER The effects of computerization on the accounts of a business will differ from business to business, depending on the nature of the business concerned. A computerized accounting system is fairly rigid. You will need to adapt your previous manual system to accommodate your new computerized system. If your new computerized system means that each sale will be processed through the computer, you may even have to change the layout of your business premises. In the long run, however, computerization will offer you speed of processing, as well as full control of your customers, suppliers and inventory. 1.5.3 DETERMINE YOUR ACCOUNT STRUCTURE All businesses need a General Ledger. Income Statement accounts reflects the operating profit/loss while the Balance Sheet gives a picture of the overall position of the enterprise. The rules for formulating a set of General Ledger accounts are based on generally accepted principles and will be dealt with a little later in this module. If a business has customers, accurate statements will need to be sent out. These will be based on the number of days an account is outstanding, so that you can formulate a credit policy. This policy can include handing customers over to debt collectors. Pastel Partner can be run on an entirely batched system, or with invoicing. 1. The entirely batched system does not need inventory control. Invoice totals are entered from manual invoices. In this case, invoice totals for customers will be captured in the sales Journal as a batch. Once updated to the ledger, statements can be sent to customers and an Age Analysis can be produced. (You will be using this method to record transactions for the first month.) 2. The invoicing system produces an invoice per customer, as well as updating the inventory if required. In this case, the invoice will update the Sales and Debtors figures. Once the Invoices have been updated, Statements and an Age Analysis can also be produced (You will be using this method to record transactions for the second month.) We will start this course using the batch system, and then convert to invoicing of customers in order to send them statements using Pastel’s pre-defined statement layouts.



Suppliers often give varying payment terms. It can be to your advantage to extend payment to the last minute to help your cash flow. An accurate picture of your suppliers will also let you budget for possible lean months. Suppliers can also be batched and if stock needs to be updated, the trade suppliers can be taken on via a Purchases Note. The ideal situation is one which you bill your customers immediately and pay your suppliers timeously and have the most profitable and fastest moving inventory on hand at all times. This ideal can be approached if you are using an integrated inventory system. In an integrated system, Purchase Notes (Goods Received Vouchers) are recorded as stock is received. As customers buy stock, invoices are completed, and stock is sold, and as returns are made and received, the necessary inventory levels are automatically adjusted. 1.5.4 DETERMINE YOUR VAT REQUIREMENTS What is VAT? Vat STANDS FOR “Value Added Tax”. Why “Value Added”? If you look at the flow of one transaction through a business, it becomes evident that VAT is levied only on the profit portion (the so-called “Value Added” portion) of a transaction. Standard formulas have been set up by the Receiver of Revenue which will calculate the profit made on a transaction and then calculate the VAT. The following is an example of a typical VAT transaction: A camera is initially purchased from a manufacturer for resale at a price of R100.00, plus VAT of R14.00. The reseller pays the manufacturer R114.00. The manufacturer pays over the R14.00 VAT levied to the Receiver of Revenue. Thus, at this point, VAT of R14.00 is paid. When the camera is sold by the reseller for R200.00, VAT of R28.00 is added (14% of R200.00) giving a total selling price of R228.00. Only R14.00 Vat is now payable to the Receiver of Revenue by the seller because R14.00 was already paid when the first transaction took place. The VAT Return will therefore be calculated as follows (assuming that the above transaction was the only one that took place): VAT RETURN FOR THE PERIOD xxxx Description Rand Sales of R22.00 X 14 over 114 R28.00 Less: VAT paid on purchases R14.00 VAT payable to Receiver of Revenue R14.00 Please note that the formula used to calculate the VAT on the value of the sale is a standard formula used to calculate VAT at 14%. Should the rate ever change to, for example, 15%, the formula applied will be as follows: the amount including Vat x 15 / 115. With the introduction of Value Added Tax, just about all types of transactions have become subject to tax legislation. Ordinary purchases and sales are subject to VAT. So are: 1. Donations of trading stock and used capital goods. 2. Dividends in kind (i.e. non-cash dividends). 3. Compensation for cancellation of a contract.



There are only a few transactions on which VAT is not charged. A deposit paid on returnable bottles is one of the few common transactions to fall outside the VAT net, as dos the purchase of milk, bread and fresh produce. B. VAT TAX RATES Under VAT, there are four categories for which you should allow in your system. There are: Standard Rated: Most items will attract VAT at the standard rate. At the time of writing this course, VAT is at 14% and you will be doing all transactions at this rate. The Capital Rate: All capital items that you buy or sell also attract VAT. These need to have a separate tax code so that you can get a separate total for input on CAPITAL ITEMS to fill in on the VAT 201 form. Zero Rated: Some goods, such as exported goods and petrol, attract VAT at 0%. These goods are regarded as taxable and must be counted for as such. The tax involved is simply at a zero rate. This information is used when filling in the Vat 201 form. It is also necessary to create an audit trail. Exempt: These are imams not taxable, such as milk, bread, fresh produce and rentals charged on private accommodation. Not applicable: When accounting for VAT there are some transactions that do not attract VAT and are not even exempted as they are net amounts. The most important of these is Capital put into the business by the proprietor. This money is “not applicable” as it has already been taxed (Income tax.) It is important to know and understand the definitions on the following page before you continue, as they will be referred to often during the course. C. DEFINITIONS INPUT TAX VAT paid on anything that comes into a business. This will include purchases of stock, operating expenses, rental of premises and purchase of fixed assets. Not: In terms of VAT legislation, one must be able to differentiate between various types of input tax, i.e. VAT on ordinary transactions and VAT paid on the purchase of fixed assets. INPUT TAX CREDIT The input tax that can be proven to have been paid (the claimant must be in possession of a tax invoice or a duplicate tax invoice that is marked as such) and can be claimed back from the Receiver of Revenue. INPUT TAX CREDIT ON CAPITAL EQUIPMENT The Receiver of Revenue requires that input credits claimed on capital purchases be accounted for separately. If a capital purchase resuls in the input VAT amount claimed being larger than output VAT for the period, an inspector will be sent to check the validity of the claim. A numbered Tax Invoice must be produced. OUTPUT TAX VAT charged on anything that has been sold by the business. In a service industry, this would be the service provided and in a trading industry it would be stock sold.



DEENED SUPPLY Any goods or services supplied by the business during the course of its trading. REGISTERED VENDOR A person or entity that has registered for VAT purposes. D. ACCOUNTING FOR VAT There are two ways of accounting for VAT. These are the Payments method and the Invoice method. THE PAYMENT METHOD VAT can sometimes cause serious cash flow problems, particularly when customers are paying slowly, for example, on sixty or ninety days, and when suppliers are being paid on thirty days. In this scenario, the VAT inputs exceed the VAT outputs. The receiver of Revenue is aware of these problems and has made a special dispensation. The Receiver sometimes allows these companies to operate on the Payments method. The payment system will allow you to account for the VAT outputs as and when the tax is received, and not when it is invoiced. Under the payment system, the onus is on the company to track all invoices on credit sales accurately, and to be able to prove at any time which output tax has been received. The company must also be able to track accurately what tax has been paid. This type of tracking is easily possible on a computerized accounting system. Pastel Partner does this by posting VAT to a provisional tax account before sending it to the tax control account. Pastel does this in two ways: “Open Item” Customers: These are customers for whom each transaction is recorded and accounted for. As payments are made by the customer, the payments must be allocated to the transaction concerned. In Pastel, amounts are allocated against transactions, and the tax is moved during batch posting from the provisional account to the tax control account. Individual transactions can be zero rated or exempt. “Balance brought forward” Customers: This system does not keep track of the individual transaction after you move into the next accounting period. The balance brought forward is deemed to be Standard Rate, and tax is posted from the provisional tax account to the tax control account at this rate. This system is more difficult to administer. One should register under the payment method only if the output VAT is going to cause cash flow problems.



THE INVOICE METHOD This is by far the most common form of accounting for VAT. Under this system, VAT charged on sales during the accounting period will be deducted from VAT paid during the same accounting period, and the balance will be handed over to the Receiver of Revenue. HOW DO THE DIFFERENT RATES AFFECT A BUSINESS? When a business makes a purchase and pays VAT on the purchase, the VAT can be claimed back as long as the purchase was used to make taxable supplies (standard or zero rated). If the purchases were made to produce only exempt supplies, then the VAT cannot be claimed back. It may happen that a business is classified as being “partially exempt”, i.e. makes both exempt and taxable (standard and zero rated) supplies. Partial exemption will only apply if exempt supplies constitute more than 10 % of total taxable and exempt supplies added together. In this case, only some input tax can be claimed back from the Receiver of Revenue. E. STATIONERY AND ADMINISTRATION REQUIREMENTS FOR VAT INVOICING The main document effecting proof of VAT paid is the “Tax Invoice”. The VAT Act states that whenever a registered vendor makes a taxable supply to another registered vendor, the supplier shall provide the recipient with a “tax invoice”. The recipient requires a tax invoice in order to recover, from the Receiver of Revenue, the amount of tax reflected thereon. In practice, most invoices are tax invoices irrespective of whether the recipient inters claiming the VAT back or not. A Tax invoice is a normal invoice that has the words “TAX INVOICE” printed on it. It is illegal to issue more than one tax invoice per taxable supply. If a copy invoice is supplied, it should clearly state “COPY INVOICE”. The following information must appear on a tax invoice: 1. The words “TAX INVOICE” in a prominent place. 2. The supplier’s name, address and VAT registration number. 3. The name and address of the customer. 4. A unique invoice number. 5. The description of the goods. 6. The quantity of goods supplied. When it comes stating the Rand Value of the goods supplied, two methods can be use as follows: INCLUSIVE INVOICING The total of each line item on the invoice including VAT can be stated with a grand total at the end. The wording “The amount charged includes VAT” must appear on the invoice. This method of invoicing can present problems when items charged at different tax rates appear on the same invoice. EXCLUSIVE INVOICING The total of each line item on the invoice excluding VAT can be stated with a subtotal at the end. VAT would then be charged on the subtotal and a grand total would appear thereafter. An alternative method of exclusive invoicing could show VAT per line item with a grand total at the end.



1.6 TAKE ON YOUR OPENING BALANCES Once you have completed the full analysis of the business, you should ensure that you have a trial balance from which you will be able to enter the opening balances in your computerized system. 1.7 RUN YOUR MANUAL AND COMPUTERISED ACCOUNTS SIDE-BY-SIDE Once you have started running your computerized system, it is strongly recommended that you operate your manual and computerized systems simultaneously for a time possibly two to three months. This will allow you to sort out any potential problems before you remove your manual system completely. 1.8 PHASE OUT YOUR COMPUTERISED SYSTEM After running your computerized system for a few months, you will have sorted out any problems, and adapted to your new system. At this point, you will be able to move fully to your Pastel Partner system. It is recommended that the books used for your manual system be stored, in case of occasional problems. In general, however, you should be able to run your computerized accounting system without any problems. You should find that your new system is less cumbersome, and that your paper work is greatly reduced. 1.9 LOADING PASTEL Click on START then click on PROGRAMS go to PASTEL PARTNER VER5 then click on PASTEL 5. The Pastel Partner Startup Screen should now be displayed. The Pastel program should now be loaded, and this screen should be displayed: 1.10 THE PASTEL PARTNER SCREEN The Title Bar Software Sales (demo) The Title Bar at the top of the window identifies the company file that is presently open. The Menu Bar File Edit Process View Change Setup Utility Window Help If an option is selected from the menu bar, a pull-down menu with options relating to the selected heading will be opened. Options are selected from these menus to enable you to carry out your financial tasks. An option can be selected from the menu bar by pointing the mouse at the option and clicking the left mouse button once, or by holding down the Alt key whilst pressing the underlined letter of the option. For example, Alt-F will display the File pull-down menu. The Pastel Partner File and View pull-down menus are displayed below: Open Zoom � New Drill � Delete ___________________ General ledger � Consolidate Customers �



Export/Import Suppliers � _______________ Data Integrity Inventory � Backup Price Lists � Restore Manufacturing � Format Diskette ___________________ ________________ Printer /Fonts Setup Cost codes � ________________ Exit Pastel Foreign Currency � ________________ 1 C: /PAS5 \DEMO Open batches � Graphs � Financial Ratios � Notes � Some of the options in the pull-down menu have an inverted triangle displayed next to them, for instance, General Ledger. If one of these options is selected, another menu will be displayed from which further options must be chosen. The Esc key will close the active window without saving anything you have entered since opening it. The Esc key will also close a pull-down menu without selecting any of the options The Icon Bar The Icon bar has several icons on which you can click as shortcuts to opening dialog boxes using options from the menu bar. The menu bar, however, has many more choices than the Icon bar. The Icon bar can be customized, i.e. icons can be added and deleted from the Icon bar. This will be discussed later in the course.

RETURN TO THE RECORDING 1.11 CREATING A NEW COMPANY Creating a new company in Pastel can be confusing and time-consuming. For this reason, Pastel has three methods by which you can create a new company. Use Set-Up Assistant If you choose this method, Pastel will assist you in creating your company, by asking you a series of questions. Based on your answers, Pastel will create a company which conforms as closely as possible to your requirements. You will probably need to edit this company to make it meet your exact requirements, i.e. you may need to create additional general ledger accounts to complete the chart of accounts, etc. The set-up assistant will, however set up the necessary controls, most of which are standard to all. Copy Another Company Once you have created a company, and have edited it to meet your exact requirements, you can use this company as a skeleton company. This is particularly useful if you are going to run the accounts of several similar companies. You can create the skeletonjust once. You can then copy this skeleton company into one or more other companies. If you have information in the skeleton company, you can still copy it into another company, and Pastel will give you the opportunity of clearing all the existing balances in



the copied company, leaving only the skeleton for you to start recording the transactions of the new company. Start New Company This method allows you to create a new company from scratch. We do not recommend that you use this option unless you are familiar with how Pastel works and how various modules integrate. During this course, we are going to copy an existing skeleton into a new company. You will use this new company for the duration of the course. To copy the skeleton into a new company, do the following: 1. Select the File option from the menu bar. 2. Select the New option from the pull-down menu. 3. You are now prompted for the name of the new company. This name must be no longer than eight characters and must not contain any spaces. The name must be typed in uppercase letters. Type your initials followed by the word COMP, i.e. if your name is Joe Bloggs, type JBCOMP. 4. Ensure that the Copy Another Company option is selected. (A black dot should appear next to the option.) 5. Click on the Sample Company in the Existing Companies list. 6. Click on create. The name of your company should now be displayed in the title bar at the top of the screen. 1.12 ENTERING THE COMPANY DETAILS 1. Select the Select option on the menu bar. 2. Select the Company Parameters option from the pull-down menu. The following screen will be displayed: The TAB and SHIFT+TAB keys The TAB key is pressed once to move forward through the fields. To move backwards through the fields, hold down the SHIFT key and press the TAB key. Screen Tabs A number of TABS are displayed across the top of this data entry screen. They are labeled Company Details, Processing, Formats and Multi-Currency. Each Tab is attached to a data entry screen. The Tab currently displayed data entry screen will be displayed in front of the others. At the moment, the Company Details data entry screen is displayed, and the Company Details Tab is displayed in front of the others. To display the data entry screen attached to one of the other Tabs, you would click on that Tab. All the Tabs and their attached data entry screens displayed under the Company Parameters option relate to the company details. Most of the data entry screens in Pastel Partner Have Tabs to display relevant data entry screens. Often, a great deal of information is required under an option, and the Tabs are used to divide the information is displayed uncluttered and thus is easy to use. Description of Fields



Control Name This field is for the full company name. The name that you type in here will appear on all invoices, statements, purchase orders, etc. Postal Address This is the postal address of the company. This information will appear on all the Pastel documentation mentioned above, along with the company name. Information Any additional company information is recorded in this field, i.e. telephone number, fax number, company registration number, VAT number, etc. You could click on any of the other Tabs to display the next data entry screen, or click on OK to save the information. If you did not want to save the information just entered, you would click on CANCEL.

RETURN TO THE RECORDING 1.13 THE DATA REMOTE The Data Remote section of the screen is found on the right-hand side of the screen. It is divided into two sections. The top section is the Editing section, and the bottom section is the navigation section. The editing section allows you to create new records and edit and delete existing records. The buttons in the navigation section allow you to move through the records and find specific information. New or Edit button New Use this button to create new records or to edit existing records. Delete Delete Use this



Memory buttons You can memorize a record and come back to it later by first displaying the record and then clicking on the Set Memory button (the button on the left.) Continue adding, editing or deleting records. When you are ready to return to the record you have memorized, click on the Go To Memory button (the button on the right.)

RETURN TO THE RECORDING 1.14 COMPLETING THE CHART OF ACCOUNTS To add additional accounts to the chart of accounts, select the General Ledger Accounts option from the Edit pull-down menu. The following screen will be displayed: Example 2: Main account Number: 100 Sub Account Number: 001 Account Description: SALES OF HARDWARE The Financial Category and Report Writer Category will be the same as the main account (100) Description of Fields Main Account Number This is the number assigned to this account. All the Income and Expenditure accounts will be assigned codes between the numbers 000 and 499. The Assets and Liability accounts will be assigned codes between the numbers 500 and 999. Sub Account Number This is the sub-account number, i.e. any account that fall under the main account group. Sub-accounts will be assigned numbers from 000 to 999, which are sub-accounts of the main Income Group 100. Account Description This is a description of the account being created. Block This is used to put a “block” on an account. If this option is selected, Pastel will not allow you to process any transactions in this account. Financial Category: Income Statement or Balance Sheet You need to categorize each account you create either as an income statement account or account or a balance sheet account. All sub-accounts will automatically be assigned to the same category as the main account. Generally, all income and expense accounts are income statement accounts and all assets and liability accounts are balance sheet accounts.



Report Writer Category During this course, we are going to use the standard income statement and balance sheet. You can, however, use the Pastel Report Writer to create a more detailed income statement and balance sheet. If you choose to create the more detailed reports, you will have to assign each account you create to a report writer category. If you use the Pastel setup assistant to create company, Pastel will automatically assign a report writer category to each account you create. External Reference This is a code that you can use to link this account to somewhere in another program. For instance, if you want to work on forecast in Lotus 1-2-3, this reference could be a Lotus 1-2-3 cell address. When you print a Trial Balance in Pastel, the external reference can be printed alongside each account. This will make it easy for you to match up the accounts with the spreadsheet.

RETURN TO THE RECORDING Accounts Listing (Chart of Accounts) Account Income Stat/ Financial Report Writer Number Description Balance Sht Category Category 100/000 INCOME/SALES Income Statement Cost of Sales Income 100/001 SALES OF HARDWARE 100/002 SALES OF SOFTWARE 100/003 SALES OF STATINERY 100/004 CONSULTING FEES 200/000 Purchases/Cost of Sales Income Statement Cost of sales Expenditure 200/001 Purchases of Hardware 200/002 Purchase of Software 200/003 Purchases of Stationery 200/004 Consulting fees 110/000 Discount Received Income Statement Other Income Income 120/000 Interest Received Income Statement Other Income Income 130/000 Delivery Income Income Statement Other Income Income

RETURN TO RECORDING 210/000 Accounting Fees Income Statement Expenses Expenditure 220/000 Advertising Income Statement Expenses Expenditure 230/000 Bank Charges Income Statement Expenses Expenditure 240/000 Directors Remuneration Income Statement Expenses Expenditure 250/000 Depreciation Income Statement Expenses Expenditure 252/000 Discount allowed Income Statement Expenses Expenditure 255/000 Electricity, Rates & Water Income Statement Expenses Expenditure 260/000 Entertainment Income Statement Expenses Expenditure 270/000 Insurance Income Statement Expenses Expenditure 280/000 Interest on Overdraft Income Statement Expenses Expenditure 290/000 Lease on Office Equipment Income Statement Expenses Expenditure 300/000 Lease on Motor Vehicles Income Statement Expenses Expenditure 310/000 Motor Expenses Income Statement Expenses Expenditure 310/001 Petrol 310/002 Repairs and maintenance on motor vehicle 320/000 Printing and stationery Income Statement Expenses Expenditure 330/000 R S C Levies Income Statement Expenses Expenditure 335/000 Rent Income Statement Expenses Expenditure 340/000 Repairs and maintenance Income Statement Expenses Expenditure 340/001 R & M on Office Equipment 340/002 R & M on Buildings 350/000 Salaries Income Statement Expenses Expenditure 350/001 Basic Salaries P A Y E



350/003 UIF 355/000 STOCK ADJUSTMENT ACCOUNT Income Statement Cost of Sales Expenditure 370/000 TELEPHONES Income Statement Expenses Expenditure 380/000 TRAVEL Income Statement Expenses Expenditure 390/000 WAGES Income Statement Expenses Expenditure 500/000 CAPITAL Balance Sheet Share Capital Liabilities 510/000 ACCUM INCOME & EXPEND. Balance Sheet Retain Income Liabilities 550/000 LOAN – NEDFIN Balance Sheet Long Term Borrow. Liabilities 600/000 FURNITURE & FITTINGS Balance Sheet Fixed Assets Assets 605/000 ACC DEPREC. FURN. & FITTING Balance Sheet Fixed Assets Assets 610/000 COMPUTER EQUIPMENT Balance Sheet Fixed Assets Assets 615/000 ACC DEPREC. ON COMP. EQUIP Balance Sheet Fixed Assets Assets 700/000 CUSTOMER CONTROL ACCOUNT Balance Sheet Account Receivable Assets 750/000 TRADING STOCK Balance Sheet Inventory Assets 800/000 SUPPLIER CONTROL ACCOUNT Balance Sheet Accounts Payable Liability 850/000 VAT CONTROL Balance Sheet Other Current Liab. Liability 855/000 VAT PROVISION ACCOUNT Balance Sheet Other Current Liab. Liability 900/000 BANK CURRENT ACCOUNT Balance Sheet Bank Bank 910/000 PETTY CASH Balance Sheet Bank Bank 999/000 SUSPENSE ACCOUNT Balance Sheet Other Current Liab. Liability 1.15 BACKING UP YOUR ACCOUNTS Pastel uses different backup options. (To see the different options you would select the Company

Parameters option from the Setup pull-down menu, and then click on the Format/Backup Tab. You could then select your option. Leave the option as ZIP Format for this course.)

Select the Backup option from the File pull-down menu. The following screen should be displayed: • File Backup

x Backup Method Verify Method Where to Backup To Process � Zip Format � No Checking A: � � WINDOWS 95 / NT � Ensure Files Readable � A: Cancel � WINDOWS 3.X IMAGES � DOS VERSION 5 � Backup Images • Ensure that the Where To Backup is set to the A: drive • Click on the Process button • A message will appear – click on OK • When the backup is complete, click on the close button. 1.16 EXISTING PASTEL • Select the EXIT option from the FILE pull-down menu. A message will be displayed warning you that you should backup before existing. • Click on NO.



2.1 OPENING AN EXISTING COMPANY To open the company you created in lesson one, do the following: 1. Select the Open option from the File pull-down menu. 2. Click on the file created in lesson one, i.e. JBCOMP 3. Click on OPEN Your company name should now appear in the title bar.

RETURN TO THE RECORDING 2.2 CREATING CUSTOMER ACCOUNTS To create customer accounts, select the Customer option from the Edit pull-down menu, and then select the Accounts option. Details of first customer: Mr. J. Price Additional Details: Account Code: PRI001 Description: PRICE, JAMES Customer Category: 00 <None> Open Item Currency Code: 00 – Home Currency Statements: Print Statement Postal Address: P. O. BOX 5600 JOHANNESBURG 2000 Delivery/Contact Details for Mr. A. Samson Contact Person: James Telephone: 458-1111 Fax: 458-1111 Mobile Phone: 082 911 3333 Email Address [email protected] Delivery Address: 11 KATHERINE STREET SANDTON 2145 Details of second customer: Mr. A Samson Additional Details: Account Code: SAM001 Description: SAMSON, MR A Customer Category: 00 <None> Open Item Currency Code: 00 – Home Currency Statements: Print Statement Postal Address: P. O. BOX 9100 SANDTON 146



Delivery/Contact Details for Mr. A. Samson Contact Person: Alan Telephone: 608-2121 Fax: 608-2121 Mobile Phone: 082 912 3434 Email Address [email protected] Delivery Address: 11 KATHERINE STREET SANDTON 2145 Description of fields on Customer Edit Accounts screen: Account Code All customers that you create on Pastel must be assigned unique six-digit alphanumeric account code. It is recommended that the account code be broken down into two parts, the first part identifying the customer name or company name, and the second part being a numeric number identifying the actual customer. For instance, if you have two customers, John Smith, and Smith Holdings, John Smith could be given the code SM1001 and Smith Holdings could be given the code SM1002. When Pastel prints a report according to account code, it will print Smith Holdings below John Smith. Any subsequent customers with the surname or company name of Smith, will be given codes SM1003, SM1004, etc. Description This is the full name of the company or the customer. This description will appear as the first line of the postal address on all invoices and statements, etc. If the customer is a person, it is recommended that his surname is typed first followed by a comma and then his salutation and first name. For instance, Mr. John Smith should be typed: Smith, Mr. John. This will enable Pastel, when printing according to Name, to list John Smith with other Smiths. In the above example, John Smith will appear below Smith Holdings as M for Mr. comes after H for Holdings. (The first word of both is Smith.) Pastel will, however reverse the surname around the comma when printing Mr. Smith’s name on invoices and statements, i.e. Mr. John Smith. Customer Category It is possible to categorise your customers into several groups. This will enable you to extract reports relating to specific categories only and also to send the same invoice to all customers in the same categories. If your company sold medical supplies, you could, for instance, categorise your customers into dentist, general practitioners, physiotherapist, If your company is a service company, several of your clients may have a service contract. This may require you to send the same invoice to the same customers every month. Categorising these clients into the same group would require you to create the invoice just once, and then instruct Pastel to create the same invoice for all the customers in the same category. Open Item /Balance Forward Patel allows you to run customers on an on an Open Item or Balance Forward Basis:



Open Item This means that Pastel will keep track of every transaction for the customer. All payments will have to be allocated against a specific invoice. The statement for n open item customer will show all invoices outstanding for payments and all payments. Balance Forward This means that Pastel will keep an accumulated total of invoices and payments for each ageing period. All payments will be allocated to an aged balance (not to a specific invoice). The statement for a balance forward customer will show a balance brought forward from the previous month. The open item basis will give you more control over your customers. It does however, involve more work, as each payment has to be allocated to a specific invoice. Currency Code Pastel allows you to work in many different currencies. Once a currency code is selected for a customer, all transactions will be done in that currency. You cannot change between two different currencies I the same account. If you are only invoicing and receiving payments in one currency, i.e. the South African rand, leave this option as 00-Home Currency. Statements There are three under this heading: Print Statements If this is selected, the customer will receive a normal statement at the end of the month, reflecting all purchases and payments as well as outstanding balances. You can choose to include a message on the statement according to the ageing period of the oldest outstanding balance. If the customer has only a current account balance, you may want to include a more harsh message warning the customer that he is about to be handed over to debt collectors if his oldest balance is in 120 days. You can choose one of the other two options namely email and print. Suppress Aged Messages If the option is selected, none of the aged messages mentioned above will be displayed on the statement (even if the oldest balance is in 120 days). The message that will appear on the statement will be the same message as a customer who has only a current balance for example, “Thank you for your business”. Suppress Statement If this option is selected, no statement will be printed for this customer at all. Postal Address This is the postal address of the customer. It will appear on all invoices and statements as the address to which these documents will be posted. Delivery/Contact Details When you click on this button, an additional data entry screen will be displayed prompting you for the contact person, telephone number, fax number and delivery address of the customer.



Several TABS appear across the top of the details area. When selected, each of these tabs will display an additional data entry screen with further options relating to the control of customers. Tax The options in this screen relate to the default tax that will be used for this customer. Most customers will be invoiced at the standard rate (14%). If, for some reason, this customer will be invoiced at another tax rate, select the Override Tax option, and choose a different tax type. Also, on this screen, you must select the default method of invoicing (inclusive or exclusive). Both of these defaults can be changed at the time of invoicing. Terms The option on this screen refer to the payment terms that you are offering the customer, i.e. when his account is to be paid. This screen also has the facility to enforce a credit limit on the customer. When this limit is reached, Pastel will warn you. You can, however, bypass the warning and continue invoicing the customer. The price list option requires you to choose a price list from which you are going to invoice for this customer. Pastel allows you to have up to three different price lists, which you may use for several types of customers, for example, Rental, Wholesale, and Student. If you allow a customer a regular overall discount, you can type it into the Invoice Discount % field. This discount will then automatically be calculated on all invoices created for this customer. This discount can be ignored or changed at the time of invoicing. User-Defined The options in this screen allow you to record several messages that you may want to include on the invoice. You can include one or all of these messages on the invoice. Balances This screen displays the customer’s balances for two financial years. It enables you to compare the sales and amounts due for the same period in two financial year. Data Remote Use the buttons in data remote area of the screen to create new customers, edit existing customer information and delete customers. You can also use the data remote area to move through your customer records and search for a specific customer.

RETURN THE RECORDING 2.3 CREATING SUPPLIER ACCOUNTS To create supplier accounts, select the Supplier option from the Edit pull-down menu.



Details of additional suppliers: Account Code Description TOM001 TOMORROWS SOFTWARE MOD001 MORDERN BOOK SUPPLIES Both of these suppliers are to be run on a Balance Forward basis. Make up your own postal and physical addresses, as well as a contact name, telephone and fax number for these suppliers. Description of fields on Supplier Account Screen: Most of the fields on this screen are the same as the option on the Customer Account screen. It is recommended that you use the same method to create account codes for suppliers as used to create customer account codes. The details on the Supplier Account screen relate to the terms and conditions that are offered to you by your suppliers, for example, the default tax code, payment terms, etc.

RETURN TO THE RECORDING 2.4 GENERAL LEDGER, CUSOMER AND SUPPLIER LISTINGS Follow the instructions below to print a list of the General Ledger, Customer and Supplier accounts that you have created during this lesson. General Ledger Listing Select the General Ledger option from the View pull-down menu. Select the Listings, and then the Accounts options. Print to: All reports generated by Pastel can be printed on the printer or displayed on the screen. Reports can also be exported to a word processing or spreadsheet format. The default is to display the report on the screen. To change the selection, click on down arrow in the Print To field, and select the relevant option from the selection list. Click on OK to display the report. The report shown on the next two pages should be displayed on the screen. (if your report does not correspond to this report, Close, the report and select the changes and then redisplay the report.) Masterfile Listing



Account RW Ca Blocked ext Ref Financial Category: B10-Share capital 500/000 CAPITAL 12 Liabilities No Financial Category: B15-Retained income 510/000 Accumulated income & expenditure 12 Liabilities No Financial Category: B25-Long term borrowings 550/000 LOAN-NEDFIN 12 Liabilities No Financial Category: B35-Fixed assets 600/000 FURNITURE & FITTINGS 1 ASSETS No 605/000 ACC DEPR ON FURN. & FITTINGS 1 ASSETS



CUSTOMERS To display the customer listing, select the Customers option from the View pull-down menu. Select the Listings option, and then select the Accounts option. The following screen will be displayed: (Click in the Show Details and Print User Defined Fields options to deselect them.) Ensure that the option on your screen correspond with the options and click on OK. The report displayed on your screen should correspond with the report shown below. If it does, close the report, and then select the Customers option from the Edit pull-down menu. Make the necessary changes and then re-display the report. Acc No. Description Type Curr. Payment Price Country Interest Cat

Code Terms List

PR1001 PRICE-JAMES B/F 0 0 1 90 0

SAM001 SAMSON,MR A O/I 0 0 1 90 0

Click on Close to close the report.

Suppliers

To display the Supplier Listing, select the Suppliers option from View pull-down menu, and then select the List Suppliers option.

Ensure that the option on your screen correspond with the options shown above, and then click on OK.

The report displayed on your screen should correspond with the report shown below. If it does not, close the report, and then select the Suppliers option from the Edit pull-down menu. Make the necessary changes and then re-display the report.

Supplier Listing

Acc NO. Description Type Curr Payment Country

FUT001 FUTURE COMPUTERS B/F 0 0

MOD001 Modern Book Suppliers B/F 0 0

TOM001 Tomorrows Software B/F 0 0


RETURN TO THE RECORDING



2.5 TAX TYPES

Pastel calculates VAT according to the codes you enter when setting up Pastel. The set of books on which you are working has been set up as follows:

00 This is used to instruct Pastel to ignore VAT, i.e. not applicable.

01 This is used to instruct Pastel to use the standard rate VAT of 14%, and will be used to pay or claim VAT on any normal transaction.

02 This has been set to 14% on capital items, and will be used whenever you want to claim VAT on purchases of fixed assets.

03 This has been set to 0% for zero rated goods, for example, exports.

04 This has been set to 0% for exempt supplies.

2.6 ENTERING OPENING BALANCES

Opening balances are recorded in General Journal.

Select the Process option from the menu bar, and the Journals option from the pull-down menu.

From the Entry Types list, select the General Journal option.

2.5.1 GENERAL LEDGER BATCH OPTION

Before entering transactions into batch, you must make the necessary selections in the Batch Options screen. The options that you select must be valid for most of the entries in the batch. Most of the options can be changed at the time of entering the transaction. For instance, if you decide to repeat descriptions (each transaction will have the same description) , you can change the description of one particular transaction at time of entering it into the batch.

To change the batch options, click on the settings Tab at the bottom of the batch entry screen. Description of Fields: PROCESSING: This Year Transactions

This option must be selected if the transactions which you are going to enter into the batch belong to the current financial year. If the entries belong to a previous financial year (as with the opening balances), this option must be deselected. In the Batch Entry screen, the following prompt will appear at the bottom of the screen: Last Year. This means that the entries you are recording are to be posted to the previous financial year.

Invoke Open Item

You would select this option if you had open item customers or suppliers on the system. This would allow you to allocate individual invoices to open item customers or suppliers.



Repeat Descriptions

You would select this option if you were entering similar transactions, with the same description, in the batch. By selecting this option, you need to type in the description only once, in the first transaction. Pastel will then automatically use the same description for the remainder of the transactions. You can, however, change the description for any single transaction at the time of entering it into the batch.

Repeat Cost Code

As with the Repeat Descriptions option, you would select this option if you wanted to use the same Cost on all the transactions in the batch.

Multi-Currency

If you have chosen to work only in the Home Currency, this option if not be available to you.

INCREMENT REFERENCES

There are three options here.

Yes. If you select this option, Patel will automatically increment the reference by 1, for every transaction. For instance, if the reference for the first transaction in the batch is 1, Pastel will automatically calculate the references for the following transactions to be 2, 3, etc.

No. If you select this option, then Pastel will assume that all the transactions are to use the same reference that you type in for the first transaction. You will be able to change the reference for any transaction at the time of typing it into the batch.

Once. If you select this option, Pastel will increment the reference just once, at the time of opening a new batch.

CONTRA ACCOUNT

The Contra Account is sometimes known as the balancing account. Because Pastel is a double entry system, you must enter a corresponding credit transaction for every debit transaction and vice versa.

The contra account will be the ‘other’ account. For instance, if you were entering invoices, the account to be debited would be the customer’s account. The account to be credited, the contra account, would be the sales account.

Default Contra Account

This is the default contra account. Pastel will use the account code entered into this field as the contra account for all transactions entered into this batch. If any transaction entered into the batch is to use a different contra account, you must select the Contra Per Line option.

When entering opening balances, it is recommended that you create a Suspense Account and use this account as the contra account.

TAX

Tax Processing

If this is selected, you will need to make further selections relating to the default tax type and the default invoicing method, etc. If this option is deselected, then Pastel will assume that the Not Applicable tax must be applied to the entries in the batch.

You do not record VAT on opening balances. Therefore, this option could be deselected

when entering opening balances.



Default Tax Type

If the entries in the batch attract VAT, you must select a default tax type from the list of valid entries. Normally, if you are recording invoices or purchase notes into a batch, the VAT type would be 1-Standard Rate (14%). You can change the VAT type for any transaction in the batch at the time of entering the transaction.

Inclusive/Exclusive

If the transactions you are entering into the batch attract VAT, you must select whether the entries will be entered inclusive or exclusive of VAT. As with the previous option, this can be changed at the time of typing the transaction into the batch.

EDITING TRANSACTIONS

Press the Tab key to move from one entry to the next.

To correct an entry in a previous field, hold down the Shift key and press the Tab key once. This will position the cursor on the previous field. Press this key combination as many times as are required to move back to the incorrect field.

If the error occurred on a previous line, click the mouse in the field to be corrected, and then correct the error.

To delete the entire transaction, click anywhere on the line to be deleted. Click on the Line Commands Tab, and then click on the Delete button. Re-enter the transaction at the bottom of the list.

2.6.2 THE BATCH ENTRY SCREEN

Description of Column:

Per

Enter the number of the financial period into which this transaction is to be posted. Click on the down arrow next to this field to display a list of valid periods.

Date

Enter the number of the transactions into this column. The date must be a valid date within the period selected in the previous field.

GCS

Click on the down arrow in field to make a selection from the valid entries.

Select the type of transaction from the list, i.e. General Ledger, Customer or Supplier.

Account

In this column, type the account code to be affected by this transaction. Use the Zoom facility (summarized on page 21) if you cannot remember the account code.

Reference

Type a reference for the transaction in this field. If the transaction is an invoice or a purchase order, you would normally type an invoice or a purchase order number into this field. If you have selected Yes to increment the reference, the reverence number will be incremented by one each time a new transaction is recorded.

Debit/Credit

Type the amount of the transaction into the relevant column, i.e. if the account typed into the Account column is to be debited, type the amount in the debit column. (Remember, the contra account will be credited or debited with the same amount).



Job Code

Use this column to record the job code for this transaction. (This will be discussed later in the course.)

Description

Use this column to type in a description of the transaction. Make the description as descriptive as possible. When entering opening balance transactions, the description may be Opening Balance. When entering cheques into the cash book, you may choose to use the name of the Payee as the description.

Tax

This column will be displayed only if you select the Tax Processing option in the Batch Option screen. By clicking on the down arrow next to this field, you will be able to select a tax type from the list of valid entries.

2.7 THE ZOOM FACILITY

If you are unsure of a general ledger, customer or supplier codes, use the zoom facility to look it up.

Ensure that the cursor is in the field of the account to be looked up and either press F5, or click on the Magnifying Glass on the icon bar.

This will display a list of the relevant accounts, i.e. general ledger, customer or supplier.

Click on the account you require, and then click on OK to return to the batch entry screen.


2.8 ENTERING OPENING BALANCES FOR BALANCE FORWARD CUSTOMER

When entering customers onto Pastel, it is possible that the Customer will have an outstanding balance from invoices previously sent to him. These balances must be recorded in the correct period.

If the customer is a balance forward customer, then you need enter a balance for each ageing period only. For instance, he may have a 30-day, 60-day and/or 90-day balance. These balances must be entered in such a way that they will reflect correctly on the customer’s statement.

Enter these opening balances in the general journal in the same way that you entered the opening balances for the general ledger accounts. (Select the Customer option in the GCS field.)

Ensure that you select the correct ageing period before entering the transaction, i.e. if you assume that today is 1 March 1996 (period 1), then a 30-day balance must be entered into period 12 of the previous financial year (February 1996), a 60 day balance must be entered into period 11 (January 1996) and a 90 day balance must be entered into period 10 (December 1995)

2.9 ENTERING OPENING BALANCES FOR OPEN ITEM CUSTOMERS

When one enters opening balances for open item customers, the same rules apply as when you record an opening balance for a balance forward customer, i.e. the balance must be recorded into the correct aging period.

The main difference is that you need record only an outstanding balance for a balance forward customer. For an open item customer, you must record all outstanding invoices. Ensure that each outstanding invoice is recorded into the correct ageing period.



If you have selected the Invoke Open Item option in the Batch Options screen, the Open Item allocation screen will be displayed at the end of the transaction line. You must then click on the Original Invoice button to record the transaction as an original invoice for this customer. This means that, at a later stage, you will be able to post a payment against this invoice.

2.10 PRINTING THE BATCH AND UPDATING THE LEDGER.

Remember, that until you update, the entries have only been entered into a batch. None of the ledger, customer or supplier accounts have actually been updated. This means that you can still easily change any of the transactions in the batch.

When you have entered all the transactions into the batch, it must be printed and checked. You can then update the necessary ledger.

To check to which contra account(s the transactions have been posted, do the following:

• Click on Preview Tab.

• Click on the Generate button. Preview all lines.

• Click on the down arrow in the vertical scroll bar to display the contra entries which will be displayed at the bottom of the list.

The amount recorded in the contra account(s) will be the same amount as the total of the account. The two credits equal the one debit, and so the suspense account balances to zero.

To Print the batch, do the following:

• Click on Print button. Select Print with contras.

• The Batch commands screen should be displayed. (If is not, click on the Batch Commands Tab.)

• Click on the Print button.

A dialogue box should now be displayed, enabling you to select a different printer and to change the title font, and the main information font. Click on OK to continue.

Check the printout. If you find that you have made mistakes, click on the Select Batch Tab and make the necessary corrections, and then print the batch again.

Once you are happy that the entries are correct, you can update the ledgers. To do this, do the following:

• Click on the Update button.

• Update All.

You will be prompted if you wish to back up. Normally, you would update all the batches at the same time at the end of each day. For this reason, you would normally do a full backup (as you did at the end of module one before updating the batches).

The reason for making a backup at this point is that, in the event of anything going wrong during the update process, you will have a backup to restore, i.e. you can restore the batch and update again.



When the update has been completed, there will be no transactions in the batch. The transactions will have updated the relevant ledgers. If you find you have mad e an error in one of the transactions, once it has been posted (updated), you will need to make another entry in a new batch, and update again to correct the error.

For this reason, it is important to print and check your batches before you update.

2.11 PRINTING A TRIAL BALANCE

To print a Trial Balance, do the following:

Select the General Ledger option from the View pull-down menu. Select the Financial Reports option, and then select the Trial Balance option.

Any error found in Trial Balance would have originated in the General Journal Take On batch. The batch has already been updated and so it is not possible to correct any of the transactions. If the error is an amount posted to the wrong account, an entry must be recorded in a new batch to reverse the existing entry, i.e. enter an identical entry but change the debit to a credit or vice versa. The transaction must then be entered correctly, using the correct account. If the error is an incorrect amount, a transaction must be entered into a new batch for the difference. Remember, to print and update the batch, and then print the trial balance again to check that the error has been corrected.

If there are errors on the Trial Balance, please ask the Training Adviser to help you make corrections before continuing




MODULE THREE

3.1 PURCHASES JOURNAL

The transactions entered into this journal are invoices received from your suppliers. You would enter the transactions into this journal only if you did not want Pastel to control stock, ie. You had a manual system of controlling stock.

If you wish Pastel to control your stock, you would enter the transactions as purchases notes. We will look at this later in the course.

To enter transactions into the Purchases Journal, select the Process option from the menu bar, and then select the Journals option from the pull-down menu.

Click on the down arrow below the Entry Types field and select the Purchases Journal from the selections list.

Batch Options

As with the General Journal, you must click the Settings Tab to set the defaults for this batch of transactions. These will be the defaults that will apply to most of the transactions in this batch.

DESCRIPTIONS OF OPTIONS

The options are the same as the options for the General Journal. However several of the selections are different:

This Year Transactions

This option must be selected. This option is deselected only if you are entering transactions into the previous financial year (as you did when entering the opening balances). The day-to-day transactions will be entered into the current financial year, and so this option must be selected.

Invoke Open Item

This option is de-selected, because your suppliers are going to be treated on the balance forward method.

Increment Reference

The Yes option has been selected because you are going to number invoices from your suppliers. If you select this option, Pastel will automatically increment the reference number by one, every time a new invoice is entered.


When entering opening balances, you used the Suspense Account as the default contra account. This is because all the transactions in the batch used the same contra account. However, when entering invoices from suppliers, you may have several different purchases accounts. You still need to set a default contra account which will be the account used by most of the transactions. This will add another column to the batch entry screen where you can enter the contra account number if it is an account other than the default account.



Pastel will put the account number 000/000 in the contra account field . Change the default contra account to (200/001)

Tax Processing

Most of the invoices received from your suppliers will include Vat. If the items are being bought for resale, the VAT can be claimed back frm the Receiver of Revenue. For this reason, you must select the Tax Processing option.

Most of the invoices received from your suppliers will include VAT at te standard rate of 14%. You must select this option from the Default Tax Type list of selections. This tax rate can be changed for a single transaction at the time of entering it into the batch.

You must also decide whether you are going to enter the invoices from your suppliers inclusive or exclusive of VAT. (You can change the entry method for a single invoice at the time of entering it into the batch.)

If you select the inclusive method, you will need to type the total amount of the invoice, including VAT, into the inclusive column. Pastel will then deduct the amount of VAT from the total. If you select the exclusive option, you will need to type in the total of the invoice exclusive of VAT. Pastel will then calculate the Vat and add the amount to the total you have typed in.

Return to the recording

3.2 PURCHASES JOURNAL – TRANSACTIONS

Transactions 1:

On 3 March 1996 bought a computer from Future Computers (supplier account code – FUT001) for R2 280.00 INCLUSIVE of VAT. The computer was bought on our purchase order number 1, and the supplier’s invoice number was 4950.

PERIOD 01 [Tab]. This is the first period of the 1996/97 financial year (March 1996)

DATE 030396 [Tab]. This is the date of the purchase.

GCS S [Tab]. This is a Supplier-related transaction.

ACCOUNT FUT001 [Tab]. This is the supplier account code. (Use the Zoom facility to look up this code if you do not know it.)

REFERENCE PN1 [Tab]. This is the reference for this transaction. You are going to use purchase order numbers as your reference. When you enter the next invoice, you will notice that Pastel will automatically increment the reference number by one, i.e. PN2.

DESCRIPTION CR-PURCHASES-INV4950 [Tab]. This is a description of the supplier invoice. We have chosen to use the supplier invoice number in the description. The description can be anything, but it should be as descriptive as possible.

Tax 01 [Tab]. You can change the tax code for any transaction by clicking on the down arrow next to this field and selecting a tax code from the selection list. VAT on supplier invoices is usually shown as 14% (standard rate) code 01.

EXCLUSIVE/

INCLUSIVE The cursor will automatically jump to the inclusive column for you to enter the inclusive figure. This is the option that you set in the default batch options. If the invoice was to be entered exclusively, you would click on the Line Commands Tab and then on the Inc/Exc button. Alternatively, you could press F8. The cursor would then jump to the exclusive column instead of the inclusive column.



As you press Tab to move to the next field, you will notice that Pastel automatically calculates the amount of VAT and then inserts the exclusive amount into the exclusive field.

D/c C [Tab]. This means that the account specified in the Account field (Future Computers) will be credited with the amount of the invoice. (The contra account will be debited with the same amount.) If a D were typed into this column, the supplier account would be debited and the contra account credited.

CONTRA

ACCOUNT 200/001 [Tab]. Because you selected the Contra Per Line option in the Batch Options screen, this additional column is inserted into the batch entry screen. Pastel will use the Default Contra Account in the Batch Option screen. (In this case the Purchase of Hardware account 200/001.) A computer is hardware and so this transaction will use the default account.

If the contra account is to be any account other than the default contra account, you must type in the correct contra account code here. (You can use the zoom facility to find an account code.)


Preview

If you click on the Preview button, and then the Preview All Lines button, You will be able to see how Pastel has handled this transaction:

• The Supplier account (FUT001) was credited with the full amount.

• The Expenses account (200/001) was debited with the amount excluding VAT

• The Tax Control account (850) was debited with the Tax amount.

Thus, for the credit amount, there are two debits which together equal the amount of the credit.


Transaction 2:

On 4 March 2008 purchased software, to be loaded onto the new computer, for R171.00 including VAT. The software was purchased from Tomorrow’s Software (TOM001). The supplier’s invoice number is 50001.

N.B. This transaction does not use the default contra account. This transaction uses the Purchases of Software account (200/002) as the contra account.


Transaction 3

On 5 March 2008 bought a computer keyboard (hardware) from Future Computers for R114.00 inclusive. The supplier’s invoice number is 4955.

N.B. Default Contra Account


Transaction 4:

On 7 March 2008 purchased a book (stationery) from Modern Book Suppliers for R364.80 inclusive. The supplier’s invoice number is B2110.

N.B. Contra Account 200/003




3.3 PURCHASES CREDIT NOTE JOURNAL

The transaction entered into this journal is credit notes received from your suppliers. You would enter transaction into this journal only if you did not want Pastel to control stock, i.e. you had a manual system of controlling stock.

If you wish Pastel to control stock, you would enter the credit note transaction as a Return to Supplier. We will look at this later in the course.

To enter transactions into the Purchases Credit Note Journal, select the Process option from the menu bar, and then select the Journals option from the pull-down menu.

Click on the down arrow below the Entry Types field and select the Purchases Credit Note Journal from the selections list.

Settings

As with the Purchases Journal and the General Journal, you must click on the Settings button to set the defaults for this batch of transactions. These will be the defaults that will apply to most of the transaction in this batch. The default batch options for the Purchases Credit Note Journal are the same as they were for the purchases Journal.

Transaction 5:

On 7 March 2008 returned faulty keyboard to Future Computers. Received a refund of R114.00 inclusive. Your reference is PC1. The supplier’s credit note number is 1567.


To continue entering invoices from suppliers in the Purchases Journal, click on the Select Batch Tab and select the Purchases Journal option from the Entry types selection list. Click in the next blank transaction line, and enter the following transaction:

Transaction 6:

On 10 March 1996 Future Computers re-invoiced you for a new keyboard.

(R114, 00 inclusive). Their invoice number 4968.

N.B. Use the default contra account.

The transactions in the batch should correspond to the screen shown:

When you are satisfied that the transactions in the Purchases Journal and the Purchases Credit Note Journal are correct, you can Print the batches (Click on the batch Commands Tab, and then on the Print button.) You can then Update.


3.4 DETAILED GENERAL LEDGER AND SUPPLIERS AGE ANALYSIS

To view the effect which these transactions have had on the general ledger and the supplier accounts, it is necessary to print the Detailed General Ledger and the Supplier Age Analysis. Follow the instructions below to view these two reports:

DETAILED GENERAL LEDGER

Select the View option from the menu bar, and the General Ledger option from the pull-down menu. Select the Transactions option and then the Detailed Ledger option.



Click on OK display this report on the screen. The report should correspond to the report on the next two pages.

Click on the down arrow in the vertical scroll bar of the report to move the report, and the press the Page Down key to move to the next page.

Detailed General Ledger



SUPPLIERS AGE ANALYSIS

Select the View option from the menu bar, and the Suppliers option from the pull-down menu. Select the Monthly/Periodic option and then the Age Analysis option.




3.5 SALES JOURNAL

The transactions entered into this journal are invoices sent to your customers. You would enter the transactions into this journal only if you did not want Pastel to control stock, i.e., if you had a manual system of controlling stock.

If you wish Pastel to control your stock, you would enter the transactions as invoices. We look at this later in the course.

To enter transactions into the Sales Journal, select the Process option from the menu bar, and then select the Journals option from the pull-down menu.

Click on the down arrow below the Entry Types field and select the Sales Journal option from the selections list.

Settings

As the previous journals, you must click on the Settings Tab to set the default for this batch of transactions. These will be the defaults that will apply most of the transaction in this batch.

Description of Options

Invoke Open Item

This option is selected because you have open item customers.

Increment Reference

You have chosen Yes for this option so that Pastel will automatically number the invoices.

Contra Account

The default contra account is Sale of Hardware account (100/001). Most of the transactions in this batch will use this account as the contra account. You have also selected the Contra Per Line option because, as with the Purchases account, the sales account has several accounts to which sales transaction can be posted, depending on what is being sold. The selection of this option will allow you to enter contra accounts, other than default contra account.

Tax Processing

On most invoices, you will charge your customers 14% (standard rate) VAT on their purchases. For this reason, you have selected tax type 01 (standard rate0 as the default tax type. You have also selected the inclusive invoicing method.


Transaction 7

On 15 March 1996 sold one computer to Mr. James Price for R5 472.00 inclusive. Our number was INV1490. Use the description: Credit Sales.

PERIOD O1 [Tab]. This is the financial period during which the transaction took place.

DATE 150396 [Tab]. This is the date of the transaction.

GCS C [Tab]. This is a customer-related transaction.

ACCOUNT PR1001 [Tab].This is the customer account code for James Price.

REFERENCE INVO1490 [Tab]. This is your reference number. In the case of invoices, it will be your invoice number.



DESCRIPTION CREDIT SALES [Tab]. This is a description of the transaction.

TAX 01 [Tab]. This is the default tax type, because most customers will be taxed at 14% (standard rate)

INCLUSIVE/

EXCLUSIVE 5472.00[Tab]. The cursor has automatically jumped to the inclusive field, because this is the option you have set up in the default.

D/C D [Tab]. This selection will debit the customer account (PR1001) and credit the contra account (100/001).

COST CODE [Tab]. Leave this column blank for the time being. This option will be discussed later in the course.

CONTRA

ACCOUNT 100/001 [Tab]. If the transaction is to use the default contra account, press tab to accept 000/000. If the transaction is to use any other account as the contra account, type the contra account code in this field.


Transaction 8:

On 16 March 1996 sold software to Mr. James Price for R228.00 inclusive.

Your invoice number is 01491 and the description is Credit Sales.

N.B. Ensure that you use the correct contra account, i.e. 100/002 (Sales of Software).


Transaction 9:

On 20 March 1996 sold a computer to Mr. Price for R224, 00 inclusive.

Your invoice number is 01492 and the description is Credit Sales.

N.B. Ensure that you use the correct contra account, i.e. 100/003 (Sales of Stationery).

Transaction 10:

On 21 March 1996 installed computer for Mr. Price (consulting fees). Charge R300.00 inclusive. Your invoice number is 01493, and the description is Credit Sales.

N.B. Ensure that you use the correct contra account, i.e. 100/004 (Consulting Fees).


INVOICING OPEN ITEM CUSTOMERS

Transaction 11:

On 21 March 1996 sold one computer to Mr. Alan Samson for R6 270,00 inclusive. Your invoice number is 01494, and the description is Credit Sales.

N.B. This is a sale of hardware so you can accept the default contra account (100/001)

Transaction 12:

On 21 March 1996 sold Mr. Samson software for his computer at a cost of R171, 00 inclusive. Your invoice number is 01495, and the description is Credit Sales.



N.B. Ensure that you use the correct contra account-100/002- and make the transaction an original invoice.

Transaction 13:

On 22 March 1996 sold computer manual to Mr. Samson for R224, 00 inclusive. Your invoice number is 01496, and the description is Credit Sales.

N.B. Ensure that you use the correct contra account-100/003- and make the transaction an original invoice.

Transaction 14:

On 22 March 1996 charged Mr. Samson R500, 00 inclusive to install his computer and software. Your invoice number is 01497 and the reference is Credit Sales.

N.B. Ensure that you use the correct contra account – 100/004 – and make this invoice an original invoice.


3.6 SALES CREDIT NOTE JOURNAL

The transactions entered into this journal are credit notes sent to your customers. You would enter the transactions into this journal only if you did not want Pastel to control stock, i.e., you had a manual system of controlling stock.

If you wish Pastel to control your stock, you would enter the transactions as credit notes. We will look at this later in the course.

To enter transactions into the Sales credit Note Journal, select the Process option from the menu bar, and then select the Journals option from the pull-down menu. Click on the down arrow below the Entry Types field and select the Sales Credit Note Journal option from the selections list.

Batch Options

As with the previous journals, you must click on the Batch Options Tab to set the default for batch of transactions in this batch. The defaults for the Sales Credit Note Journal are the same as those set for the sales journal.


Transaction 15:

On 30 March 1996 refunded Mr. Samson R100.00 (inclusive) for consulting fees that were overcharged. Your credit note number is CN1, and the description is Credit Note.

N.B. Ensure that you use the correct contra account – 100/004.




OPEN ITEM ALLOCATION SCREEN

Because this is an open item customer, the open item allocation screen will appear once you have completed the transaction. You will have to allocate this credit not against a previously recorded invoice.

Click on the Allocate button. There are three options available.

Mark for Payment If you click on this button, you will be able to allocate this credit not against a previous invoice.

A list of transactions for this customer will be displayed. The amount to be allocated will be displayed in the To be Allocated field. Double click the Marked field of the invoices which are to be offset by the credit note or payment. As you do so, the amount in the To be Allocated field will be reduced until it is zero, and the amount in the Allocated field will be the total amount of the credit or payment. A tick will appear next to the invoices to which you have chosen to allocate.

Click on Save to save the allocation, and then click Close to return to the batch entry screen.

Auto Allocate If you click on this button, Pastel will automatically allocate the credit note for you. However, Paste will allocate the credit note against the oldest outstanding balance (which is not necessarily the correct invoice).

Edit allocations This button is used to re-allocate an already allocated payment or credit note.

3.7 DETAILEDGENERAL LEDGER AND CUSTOMER AGE ANALYSIS

To view effect these transactions have had on the general ledger and the customer accounts, it is necessary to print the Detailed General Ledger and the Customer Age Analysis. Follow instructions below to print these two reports:

DETAILED GENERAL LEDGER

Select the View option from the menu bar, and the General Ledger option from the pull-down menu. Select the Transactions option and then the Detailed Ledger option.




3.8 CASH BOOK RECEIPTS JOURNAL

All money that you deposit into the bank must be recorded in the Cash Book Receipts Journal. All money that is paid out, i.e. cheques, must be recorded in the Cash Book Payments Journal.

All deposits are written into the bank deposit book. From there, they are recorded in the Cash Book Receipts Journal. The page number of the bank deposits book is used as the reference. All entries that are made from the same page of the bank deposit book will have the same reference number.

To enter transactions into the Cash Book Receipts Journal, do the following:

Select the Process option from the menu bar, and the Cash Book option from the pull-down menu. Click on Receipts Tab options from the Entry Type selection box.

Lick on the Settings Option Tab.

Description of Options:


The default contra account in both the Cash Book Receipts Journal and the Cash Book Payments Journal will be account 900, the Bank Current Account. You cannot change this, as all deposits and payments will affect bank account.

Invoke Open Item

This option is selected, so that you will be able to post payments from customers against specific invoices.


Transaction 16:

On 5 March 1996, the following deposits were made on deposit slip no. 1

• Cash sales of hardware,R850,00 inclusive

• Cash sales of software,R1 140,00 inclusive

Entry 1:

PERIOD 01[Tab]

DATE 050396 [Tab]

GCS G [Tab]

ACCOUNT 100/001 [Tab] Sales of Hardware

REFERENCE DEP1 [Tab] The deposit book page number

TAX 01 [Tab]

INCLUSIVE/

EXCLUSIVE 2850, 00 [Tab]

DESCRIPTION CASH SALE [Tab]




Entry 1:

PERIOD 01[Tab]

DATE 050396 [Tab]

GCS G [Tab]

ACCOUNT 100/002 [Tab] Sales of Software

REFERENCE DEP1 [Tab] The deposit is made on same page as entry 1

TAX 01 [Tab]

INCLUSIVE/

EXCLUSIVE 1140, 00

DESCRIPTION CASH SALE [Tab]


Transaction 17:

The following deposits were made on page two of the deposit book, on 8 March 1996:

• Cash sales of hardware (100/001), R627,00 inclusive

• Cash sales of stationery (100/003), R273,60 inclusive


Transaction 18:

The following deposits were made on page three of the deposit book, on 15 March 1996:

• Cash sales of Software (100/002), R1 368,00 inclusive

• Cash sales of stationery (100/003), R342,60 inclusive

• Consulting fees (100/004),R1 800,00


• Mr Price (PRI001) paid the amount owing as tat 1 March 1996 by cheques

(R4 100,00). Description: PAYMENT THANK YOU.

NOTE: Do not record VAT on a payment received from a customer. The VAT would already have been raised when you invoiced the customer. It is not raised again on the payment. A payment from a customer will debit the bank and credit the customer account with the full amount of the payment. Pastel will skip over the Tax column when you enter a customer payment, and will automatically enter 00 Not Applicable.

Transaction 19:

The following deposits were made on page four of the deposit book, on 25 March 1996:

• Cash sales of software (100/002),R855,00 inclusive.




• Mr Samson (SAM001) paid R4 145,00 which is the amount owing as at 1 arch 1996. This payment is for invoices 1350, 1402, and 1450.

Open Item Allocation Screen

Because Samson is an open item customer, the open item allocation screen will appear after you have pressed tab to accept the description. The payment must be allocated against specific invoices.

Click on the Mark for Payment button, and click in the Marked column of the three invoices to be paid. The amount of R4 145.00 will move from the To Be Allocated field to the Allocated field. The three invoices should have ticks in the Marked column.

Click on Save to save the allocation, and then click on Close to return to the batch entry screen.


3.9 CASH BOOK PAYMENT JOURNAL

All money that you deposit into the bank must be recorded in the Cash Book Receipts Journal. All money that is paid out, i.e. cheques, must be recorded in the Cash Book Payments Journal.

The reference of a transaction entered into the Cash Book Payments Journal will be the cheques number.

To enter transactions into the Cash Book Payment Journal, do the following:

Select the Process option from the menu bar, and the Cash Book option from the pull-down menu. Click on the Payments TAB.

Click on the Settings Tab, and set the default for this batch.

Description of Option:


The default contra account in both the Cash Book Receipts Journal and the Cash Book Payment Journal will be account 900, the Bank Current Account. You cannot change this, as all deposits and payments will affect the bank account.

Description

The description can be anything. However, you will usually type the name of the payee, or a description of what the cheques was for, in the description column.

Transaction 20:

On 1 March 1996 you purchased stationery for office use (code 320 – printing and stationery) from CAN for R28, 50 inclusive. You used cheques no. 01234



Entry 1:

PERIOD 01[Tab]

DATE 010396 [Tab]

GCS G [Tab]

ACCOUNT 320 [Tab] The expense, asset or supplier code

REFERENCE CHQ01234 [Tab] The cheques number

TAX 01 [Tab]

INCLUSIVE/

EXCLUSIVE 1140, 00

DESCRIPTION CNA [Tab] The name of the payee


Transaction 21:

Used cheques no. 01235 to purchase batteries for office clock from Dion (340/001 – repairs and maintenance to office equipment) on 3 March 1996, for R20, 52 inclusive.


Transaction 22:

Cashed cheques no. 01236 for R500, 00 to pay wages (390 - wages) on 4 March 1996. Description: Cash – wages

N.B. VAT is not charged on wages. Therefore, the VAT code in the VAT field must be 00 Not Applicable.


Transaction 23:

Cashed cheques no. 01237 for R1 000 to replenish the petty cash float (910 – petty cash) on 7 1996. Description: CASH – PETTY CASH.

N.B. VAT is not recorded on cash drawn for petty cash. (VAT is paid on the petty cash transaction).


Transaction 24:

Used cheques no. 01238 to pay for lunch at Tinkers restaurant (260 - entertainment) on 7 March 1996. The bill amounted to R450, 00.

N.B. VAT not recorded on this transaction. Although Vat will have been charged on the bill, this VAT is not claimable and so it should not be recorded.

Transaction 25:

Cashed cheques no.01239 for R500, 00 to pay wages (390 -wages) on 11 March 1996.

N.B. Use VAT code 00 – as VAT is not charged on wages.




Transaction 26:

On 18 March 1996 used cheques no. 01240 to purchase tyres (310/002 – repairs and maintenance for motor vehicles) from Speedys for R684, 00 inclusive.

Transaction 27:

On 18 March 1996, cashed cheques no.01241 forR500, 00 to pay wages (390 - wages).

N.B. Use VAT code 00, as VAT is not charged on wages.

Transaction 28:

On 25 March 1996, used cheques no. 01242 to pay Miss Grant her Salary (350/001 - Salaries) of R1 650, 00.

N.B.As with wages, VAT is not applicable to salary payments.

Transaction 29:

On 31 March 1996, used cheques no.01243 to pay the Regional Services Council levy (330 – RSC levies) of R95, 00.

N.B. Use tax type 01.


Transaction 30:

On 31 March 1996, used cheques no. 01244 to pay the Town Council for Water and Lights and Rates. The total amount of the cheques is R285, 00. R50, 00 is to pay the rates (255 – water, lights, rates). VAT on this payment is no applicable. The water and lights payment of R235, 00 is included on the same cheques. This payment is inclusive of VAT.

N.B. A split cheque, such as this one, is entered over two lines. The rates are entered on the first line, with a tax code of 00. The water and lights is entered on the second line with a tax code of 01. Because both payments are included on the same cheques, the reference (cheques number) must be the same.

If you position the cursor on the second line of water and lights transaction, the full amount of the cheques (R285, 00) will be shown on the status line.

Transaction 31:

On 31 March 1996, used Cheque no. 01245 t0 pay the telephone bill of R416, 10 inclusive to Telkom (370 - telephone).

N.B. VAT is payable at the standard rate on the telephone bill.

Transaction 32:

On 31 March 1996, used cheque no. 01246 to pay the director, Mr. Jones, his salary (240 – director’s remuneration) of R4 000, 00.

N.B. Salary payments do not attract VAT. Use the VAT code 00.




Transaction 33:

On 31 March 1996, used cheque no. o1247 to pay supplier Future Computers (FUT001) the amount owing to them at 30 days – R3 200, 00. Description: PAYMENT.

N.B. when paying a supplier, change the option to S (for supplier) in the GCS column, and use the supplier code (FUT001) in the account field. Pastel will skip over the tax column and enter the tax code 00. This is because the VAT was raised on the invoice from the supplier. It should not be raised again on the payment.

Transaction 34:

On 31 March, used cheque no. 01248 to pay supplier Tomorrow’s Software (TOM001)

R2 171, 00 which is the amount owed to them at 30 days.


4.1 THE RECURRING BATCH

To enter transactions into a recurring batch, do the following:

Select the Process option from the menu bar, and the Cash Book option from the pull-down menu. Click on the down arrow next to Batch Type field and select the Recurring Batch Entry option.

The recurring batch entry screen is the same as the other cash book entry screens but with the addition of one extra column: the number column. This column is used to tell Pastel how many times to copy a recurring transaction to a normal batch. For instance, if you have a car rental lease that has 12 more payments before it is complete, you would type the number 12 into this column. This tells Pastel to copy this transaction only 12 times, and thereafter to ignore it.

If a transaction is for an on-going payment e.g. insurance premiums, rent salary payment, etc. leave a 0 (zero) in this column. Pastel will then always copy this transaction to the normal batch.

STOP ORDER:

1 March 1996 Insurance Company

Type in the period (01) and the date (01/03/96)

GCS G [Tab]

ACCOUNT 270 [Tab] Insurance

REFERENCE BSI [Tab] BS Means bank statement as this is the source document for this entry.

DESCRIPTION INSURANCE COMPANY [Tab]

TAX 01 [Tab] Short term insurance is all liable for VAT. (This VAT can be claimed back provided you have a tax invoice.)

AMOUNT 100 [Tab]

COST CODE [Tab]

NO. 0 [Tab]



STOP ORDER 2:

1 March 1996 Stannic Lease Photocopier


GCS G [Tab]

ACCOUNT 290 [Tab] Equipment Leases

REFERENCE BS2 [Tab]

DESCRIPTION STANNIC PHOTOCOPIER [Tab]

TAX 01 [Tab]

AMOUNT 85[Tab]

COST CODE [Tab]

NO. 0 [Tab]

STOP ORDER 3:

7 March 1996 West Vehicle Lease


GCS G [Tab]

ACCOUNT 300 [Tab] Motor Vehicle Lease

REFERENCE BS3 [Tab]

DESCRIPTION WESBANK LEASE [Tab]

DESCRIPTION WESBANK LEASE [Tab]

TAX 0 [Tab] You may not claim VAT on a motor vehicle.

AMOUNT 1300 [Tab]

COST CODE [Tab]

NO. 0 [Tab]


4.2 COPY ENTRIES FROM THE RECURRING BATCH TO THE NORMAL BATCH

• Click on the down arrow next to the Batch Type field, and select Normal Batch Entry.

• From the Entry Types selection box, select the journal into which the transaction are to be copied, i.e. Payments Cash Book Journal.

• Click on Batch Command Tab.

• Click on Copy Reccurring button.

• Ensure that the Month and Year are correct, and click on OK.

• Click on Yes to continue.

A message will be displayed stating how many transactions have been copied to the normal batch. These transactions will be copied to the bottom of the batch.



Note: Although bank changes are recurring transaction; the amount will be different every month. For this reason, bank charges are entered into the normal batch and not the recurring batch.

4.3 THE BANK RECONCILIATION

This procedure involves comparing the transaction on Pastel with your bank statement. In this way, you will be able to see what payments have not yet gone through the bank, and check that all deposits have been correctly deposited.

To begin the reconciliation, select the Bank Reconciliation option from the Process pull-down menu.

DESCRIPTION OF OPTIONS

Cash Book

Click on the down arrow next to this field to display the available cash books (receipt and payments cash book and petty cash). Select the cash book you want to reconcile.

Statement Balance

This is the closing balance according to your bank statement.

This Year/Last Year

If you are reconciling a current bank statement, you will select the This Year option. If you were reconciling a bank statement from last year, i.e. take on balances, you would select last Year.

Period

Click on the down arrow and select the period which you are reconciling, i.e. period 01 – March.

Up To Which Date

This will be the last date on the statement, usually the last day of the month.

Exact Bank Balance

You would normally leave this option unselected. If selected, Pastel will compare the bank balance on the statement with Pastel’s bank balance and report any differences. There will normally be differences, as there will almost always be transactions that have not gone through the bank at the time that the statement was printed, such as cheques, etc.

4.4 THE BANK STATEMENT

Below is the bank statement of your company for March 2008. Before you reconcile the bank statement, it is necessary to enter all the transactions on the bank statement that are not yet on Pastel into either the Cash Book Payments Journal or the Cash Book Receipts Journal



BANK STATEMENT

DH COMPUTERS

MARCH 2008

01/03

02/03

04/03

05/03

07/03

08/03

11/03

15/03

19/03

25/03

31/03

Balance brought forward

Insurance Company

Stannic Company

CHQ01234

CHQ01235

DEPOSIT

CASH DEPSIT FEE**

CHQ01236

CH01237

Westbank Vehicle Lease*

DEPOSIT

CASH DEPOSIT FEE**

CHQ01238

CHQ01239

DEPOSIT

CASH DEPOSIT FEE**

CHQ01241

DEPOSIT

CASH DEPOSIT FEE**

CHQ01242

SERVICE FEES**

14,916.00

100.00

85.00 –

28.50 –

20.52 –

3,990.00

5.00 –

500.00 –

1,000.00

1,300.00 –

900.60

1.50 –

450.00 –

500.00 –

7,610.00

9.40 –

500.00 –

5,000.00

1.00 –

1,650.00 –

55.00 -

14,916.00

100.00

14,731.00

14,702.50

14,681.98

18,666.98

18,166.98

18,166.98

17,166.98

15,886.98

16,767.58

16,766.08

16,316.08

15,816.08

23,426.08

23,416.68

22,91.68

27,916.68

27,915.68

26,245.68

26,210.68

These are stop orders that must be put through the bank account on a regular basis. They are therefore recorded into a RECURRING PAYMENTS BATCH. This is a very useful feature in Pastel as it means that all transactions that are repeated on a monthly basis need be typed into the system only once. The following month, all you need to do is copy the transactions from the recurring batch into the normal batch, and then print and update the normal batch. (You cannot update directly from a recurring batch.)

Recurring batches are available for all entry types.

These are bank charges. They are not typed into the recurring batch because the amount will differ each month. Normally, you would add all the bank charges together and enter them as one transaction into the normal batch.

RECONCILING

Reconciling from File

If selected this Tab will allow Pastel to reconcile the bank statement automatically. This requires you to have the facility to download your statement from the bank electronically.



Reconcile

The options under this Tab allow you to reconcile the bank statement manually.

Sequence

There are two selections under this option. Reference or Amount. The option that you select here will determine how the transactions are listed, and how you search for a particular transaction, that is, by reference or by amount.

DISPLAY

Display Amount

If this option is selected, the amount of each transaction will be displayed. This will allow you to compare each transaction with the bank statement and tick it off if it corresponds. However, this does require you to concentrate and to be very careful not to tick off an item if the amount does not correspond exactly.

If this option is not selected, you will be required to type in the amount of each transaction according to the bank statement. If the amount recorded in Pastel corresponds. Pastel will tick off the item. If the amount does not correspond, Pastel will display an error message, and you will be required to recall the batch make the necessary correction, and then attempt to reconcile the item again.

The second method is the safest method of reconciling, although it does take a little longer.

Hide Reconciled

If this option is selected Pastel will hide the item from the screen once it has been reconciled. This means that the list of items displayed on the screen will be shorter as it will display only items that still need to be reconciled.

Show Details

If selected, this option will open an additional display at the bottom of the list. This screen will display additional details about each item as it is selected. This is particulary important when reconciling deposits.

Pastel adds together all amounts which have the same reference. When entering the deposits, we gave all transactions which were deposited on the same page of the deposit book the same reference. For this reason, in the reconciliation, Pastel will show the reference once, and will show the amount of that reference as the total of all deposits made with that reference. Each deposit making up the reference will be shown in the details area.

The middle set of options is used to search for transaction if the Display Amount option is not selected.

Reference / Amount

If you have selected to display the items in reference order, you must type in the reference of the first item on the statement, i.e. BS1 and press Tab. You must then type in the amount of that item according to the statement, i.e. 85.00. If the two amounts correspond, Pastel will reconcile the item by inserting a tick into the reconciled column.

If you have selected the Displayed Amount option, you can reconcile each item quickly by locating the item on the statement in the list. Compare the amounts of the two transactions to ensure that they correspond. This is very important. If they correspond, click in the Reconcile column of the item and then double click to reconcile it.



Pastel will insert a tick into the Reconciled column, indicating that the item has been reconciled.

Only reconcile the items that appear on the bank statement. At the end of reconciling, you will probably find several transactions that have not been reconciled. These will be cheques and deposits that have not yet gone through the bank.

View

To check the reconciliation, click on the View Tab. The Reconciled Bank Balance and the Computer Bank Balance should correspond. The difference should be 0 (zero). If the difference is not zero, then an amount either on the statement or on the reconciliation screen does not correspond. For the error and correct it before finalizing the reconciliation.

When the difference is zero, click on the Print button to print the reconciliation. When you return to the Reconcile Tab, only the reconciled items will be displayed and you will not be able to print the reconciliation again, so ensure that the reconciliation is correct before you print it. When you return to the Payment Cash Book Journal and the Receipts Cash Book Journal, you will see ticks in the Reconciled column of those items that have been reconciled.

RETURN TO RECORDING

Petty Cash transactions are entered into either the Petty Cash Payments Journal or the Petty Cash Receipts Journal.

To enter transactions into the Petty Cash Payments Journal, select the Process option from the menu bar, and the cash Cash Book option from the pull-down menu. Select the Petty Cash Payments option from the CASH BOOK selection box.

DESCRIPTION OF OPTIONS


The default contra account will be 910 – Petty Cash. You will not be able to change this.

It is not likely that you will ever use the Petty Cash Receipts Journal, as the cheque made out to replenish the petty cash float will be recorded in the Cash Book Payments Jornal. Transaction 23 on page 31 of module 3 is an example of this type of transaction.


4.7 CREATING NEW GENERAL LEDGER ACCOUNTS

It is possible to create a new general ledger (or customer or supplier) account whilst entering transactions. You do not have to close the batch, create the account, and then re-open the batch.

There are two ways to create a new account:

1. At the account number prompt, select the zoom facility and create the new account from the search screen.

2. Use the Pastel shortcut method, i.e. F6. At the account number prompt, press F6. The edit General Ledger Account screen will immediately be displayed. Enter the details of the new account, then click on the tick to save the information, and then click on Close to return to the batch entry screen.



NEW ACCOUNT TO BE CREATED:

Main Account Number: 325

Account Description: Refreshments

Income Statement: 125 – Expenses

Report Writer Category: 5 – Expenditure

External Reference:


TRANSACTION 35:

Refreshments for staff, R125.00 inclusive.

PERIOD 01 [Tab]

Date 310308 [Tab]

GCS G [Tab]

ACCOUNT 325 [Tab] After pressing Tab; Pastel will display a message saying that the account does not exist. Use one of the methods described on the previous page to create this account.

REFERENCE MARCH [Tab]

TAX 0 [Tab] Refreshments are deemed to be entertainment and therefore you cannot claim input VAT.

INCLUSIVE 125 [Tab]

Cost code [Tab]

DESCRIPTION PETTY CASH [Tab]

TRANSACTION 36:

Repairs to motor vehicle: R50.00.

Type in the period, date and transaction type as for the previous entry. Use the Zoom facility to search for the Repairs and Maintenance on Motor Vehicles account code. (This should be code 310/002.) You may claim input VAT on vehicle repairs providing you have a VAT invoice, so the VAT code will be 01. Type in the inclusive amount of R50.00 and accept the description Petty Cash.


TRANSACTION 37:

Stationery for the month: R98.00

Type the transaction into the batch, claiming VAT. Use the Zoom facility to find the code for Printing and Stationery.

TRANSACTION 38:

Postage for the month R45.00

You will need to create this account. (315 – POSTAGES, INCOME STATEMENT – 125 EXPENSES. REPORT WRITER CATEGORY – 5 – EXPERIENCE.)

Type the transaction into the batch, claiming VAT.



TRANSACTION 39:

Paid casual Wages: R250.00. Type the transaction into the batch, No VAT is charged on wages.


4.8 MONTH END PRINTING

CASH BOOK

Select the View option from the menu bar, and the General Ledger option from the pull-down menu. Select the Transactions option and then the Cash Book Details option.

DETAILED LEDGER

Select the View option from the menu bar, and the General Ledger option from the pull-down menu. Select the Transactions options and then the Detailed Ledger option.

Notice that the Start Account and End Account options are set at 900.This is because the report is being printed for the bank account only.

Click on OK to display this report.

CUSTOMER AGE ANALYSIS

Select the View option from the menu bar, and the Customer option from the pull-down menu. Select the Monthly/Periodic option and then the Age Analysis option.

CUSTOMER STATEMENTS

Select the View option from the menu bar, and customer option from the pull-down menu. Select the Monthly/Periodic option and then the Statements option.

SUPPLIER AGE ANALYSIS

Select the View option from the menu bar, and the Supplier option from the pull-down menu. Select the Monthly/Periodic option and then the Age Analysis option.

REMITANCE ADVICE NOTES Select the View option from the menu bar, and Supplier Option from the pull-down menu. Select the Monthly/Periodic option and then the Remittance Advice option. DETAILED GENERAL LEDGER Select the View option from the menu bar, and General Ledger Option from the pull-down menu. Select the Transactions option and then the Detailed option TRIAL BALANCE Select the View option from the menu bar, and General Ledger Option from the pull-down menu. Select the Financial Reports option and then the Trial Balance option.


4.9 MONTH END PRINTOUTS

The following list is a summary of reports that you should print and file at month end.

1. The Cash Book, Bank Account and Bank Reconciliation.

2. The Copy Statements sent to customers, and the Customer Age Analysis.

3. The Copy Remittances sent to suppliers, and the Supplier Age.



4. The General Ledger for the month, and the Trial Balance for the month.

5. The printouts of the batches that you have processed during the month.


4.10 SETUP STOCK PARAMETERS

Before you are able to take on stock (inventory) or sell stock (inventory), you need to set up the stock parameters. These are the defaults that will control how the stock is handled by Pastel.

Select the Setup option from the menu bar, and Inventory option from the pull-down menu.


Integration

Integrate Inventory to General Ledger. If you select this option, you will be selecting Full Integration. This means that Pastel will not only update the Customer and Supplier account, but will also update the general ledger automatically, i.e. the cost of sales account, inventory account, etc. If you do not select this option, you will be running your accounts Partially Integrated. This means that Pastel will update only an income statement sales or purchases account. It will not update any general ledger accounts. If you want the general ledger inventory accounts to be updated, you will need to put through manual journal entries at the end of the month.

Integration Entry Type

This is the journal into which the inventory transactions are to be recorded. It is usually the General Journal or a specially created inventory journal.

Quantiites

Allow Negative Inventory

If this is selected, Pastel will allow you to invoice out stock that you have not yet entered. Sometimes stock arrives and you need to invoice it out before it has been recorded on the system. If this happens frequently in your company, you should select this option. If you want to have strict control over your inventory, and do not want stock that has not yet been recorded invoiced out, do not select this option.

Sales Orders Reserve Inventory

Some companies record orders from customers on Sales Orders. The stock is then packed from the sales order before it is invoiced out. If your company uses this method, you would select this option. The stock is then reserved when you create the Sales Order, not when you create the invoice (which is what would normally happen)

Check Reorder Level When Processing

When entering stock items, you can set a minimum level to which you will allow that stock item to drop before it is re-ordered. If you select this option, Pastel will keep a continual check on each item as it is invoiced, and as soon as the minimum quantity value is reached, Pastel will prompt the user to order more stock.

If the user has a sufficient access level (we will look at this later in the course), he can by pass the message and continue invoicing.

This is useful as, if used correctly, you should never run out of stock of any item.



Decimals

Decimals for Quantity, Decimals for Cost Price, Decimals for Selling Price.

These options determine the number of decimal places that should be displayed for these figures. You can display up to 4 decimal places. However, the norm is 2 decimal places.



Price List Descriptions

Price Lists 1, 2 and 3.

Pastel allows up to three different prices lists. These price lists will display the same items at different prices. When entering customer details, you will specify which price list must be used for that customer. (This can be changed at the time of invoicing.)

For instance, you may have a Retail price list for normal customers and a Trade price list for trade customers, or an Account price list for customers who buy on account, or even a Cash price list for customers who pay cash.

These three fields are used to name price lists. The actual prices and details of the items are entered elsewhere. (This is covered in the next lesson.)

Limits

Maximum Selling Price, Maximum Purchase Price, Minimum Gross Profit, Maximum Cost Difference%, Maximum Line Discount%, Maximum Invoice Discount %.

These options act as controls. The user will no be able to invoice or purchase stock outside the limits set by these controls. For instance, you can set a minimum gross profit margin, which will prevent the user from allowing the customer too much discount, and possibly selling an item at below cost. If the user attempts to invoice outside one of these parameters, he will be warned he is about to do so. If he has sufficient access, he will be allowed to bypass this message and continue invoicing.

Encrypted Cost Price

It is sometimes necessary to keep the cost price of items a secret. These options are used to encode the cost price of an item, For instance, as the default options stand, if the price has a zero in it, it will be replaced with an A. If the price has a 1 in it, it will be replaced by a B.

The letters can be changed around. For instance, you could move the D over the number 1(instead of A). To do this, you would click on the letter D, and hold down the mouse whilst you drag it over the number to which you want it t correspond, i.e. 1.

Make Average Cost 0, 00 When Zero Stock On Hand

If selected, this option will make the average cost price of an item zero, as soon as the stock level reaches zero.



This screen is used to divide your inventory into groups. As you add a stock item to the system, you will need to assign it to a group. This enables Pastel to report on stock per group, i.e. how well hardware has sold compared to software.



The columns to be completed will depend on the type of integration you have selected. If you have selected full integration, you will need to fill in the sales Adjustment, Cost of sales, Inventory and Count Variance fields. If you have chosen partial integration, you will need to fill in only the sales and purchases account. (If full integration is selected, there is no need to enter the Purchases account, as it is replaced by Cost of Sales account.)

The defaults buy and sell tax fields are used to enter the tax code that will be applicable to the purchase and sale of items in each group. Most items attract standard VAT and so the tax type will be 01. (This can be changed at the time of invoicing).

Inventory Group

This is the default inventory group, the group that will be used for most items. This can be changed when entering items belonging to other groups.

Discount Type

If you normally give a discount, you would select the discount type here. Each invoice that you create will then automatically default to offer the discount set here. (It can be changed at the time of invoicing.) If you do not normally offer a discount, leave this option as none.

Unit

This field is used to enter the default unit measurement, i.e. each, metre, litre etc. If you do not have a default measurement, leave this field blank.

Processing Options

Fixed Description/Cost/Change When Invoicing

These options will allow you either to automatically display the description of an item (as used when the item was recorded in the system), or to change the description of the item each time you invoice it.

Show Quantities and Unit

If selected, this option will show the quantities of each item on the invoice.

Inventory Item/service Item

You must select here whether you are invoicing physical stock items, i.e. computer, software, books, stationery etc. or service items, i.e. consultation fees. This will not limit you to invoicing only one type of item. You will be allowed to invoice service and stock items. However, if the majority of invoicing will be for service items, Pastel will create a slightly different invoice layout.


4.11 PARAMETERS FOR SUPPLIER DOCUMENTS

Before entering supplier documents, i.e. purchase orders, supplier invoices, etc. you must set up how these documents are going to look, and how they are going to be printed.

Select the Setup option from the menu bar, and the Suppliers option from the pull-down menu. Select the Document option

Description of Option

Document Options

Original Name



This is the name that will print on the original document. Some companies do not use the term Purchase Order; they use the name Goods Received Note or something similar. The name can be changed here. This name will print on the first copy of each purchase order.



Copy Name

This name can also be changed if necessary. It is the name that will print on any subsequent copy of the purchase order that is printed.

Supporting Name

Some companies print a supporting document as well as the original document. For instance, a goods received not could be printed at the same time as the purchase order. You are only naming the supporting document in this field. You will make selections later as to if and when the supporting document should be printed.

Entry Type

This is the entry type (journal) into which the purchase order transactions will be recorded. A purchase order is not an actual sale. No stock is recorded on the system. Is merely an order to the supplier for stock. For this reason, no journal will be affected by a purchase order.

Message

This field is used to type in a message that you want printed on all purchase orders.

User 0-9

Each company can have up to 10 different level of access. The following options can be set up differently for each user. You must select here the user for whom you will be setting the following parameter.

If you are the only user on the system, you will set all options for User 0 (zero).

Update on Completion of Document/Update In Batch Mode

These two options determine how Pastel will deal with the transactions. We have already selected to use batch mode. This means that the entries will be collected in a batch, and you will be able to print the batch and make corrections before the entries are updated to the ledger.

If you select the Update on Completion mode, the ledger is automatically updated as transaction is completed. You are not given the opportunity to make any changes. If you find later that changes are necessary, you will need to make a journal entry or some other entry to correct the problem.

The batch method is the safest method of entry.

When and what to Print.

The options here determine whether you want to print the supporting document, and if you do, when the original and the supporting document should be printed, i.e. on entry.

How To Be Printed

The options here determine the type of stationery you are going to use to print the purchase orders. There are three basic options for each version of Pastel.

Plain Generic (Single Sheet): If you select this option, Pastel will print the purchase order (and supporting document) on blank paper. It will print all the lines and headings as well as the purchase order details.

Pre-Printed Stationery: If this option is selected, Pastel will assume that you are going to print on pre-printed stationery, i.e. stationery on which the lines have been pre-printed. Pastel will then print only the headings and the purchase order details in the appropriate places. (This pre-printed stationery is available from any Pastel supplier.)



Pre-Printed Stationery with header: If this option is selected, Pastel will assume that you are going to print on pre-printed stationery as described above. It will also assume that your company name and details have been pre-printed on stationery, and so it will not print this information. It will print only the headings and the purchase order details.

Number of Copies

The number typed into this field will determine the number of original copies to be printed. You may want to print one for yourself and one for the supplier.

Next Number

The number typed into this field will be the next purchase order number. If you have been running your accounts manually, you will already have processed several purchase orders, and you most likely will not want your purchase order to be numbered from 1, but to follow on from the manual numbering system.

Default The Code Field To

In this field, you must specify how your items are to be inserted into the purchase order. We are going to use item codes. Pastel also has the facility to use bar codes, abbreviations or general ledger.


RETURN TO SUPPLIER

This document is used to record items that are returned to a supplier, eg. Faulty goods.

Note: The entry type is the Purchase Credit Note Journal.

4.12 PARAMETERS FOR CUSTOMER DOCUMENTS

Before entering customer documents, i.e. invoices, credit notes, etc. you, must set up how these documents are going to look, how they are going to be printed.

Select the Setup option from the menu bar, and the Customers option from the pull-down menu. Select the documents option.

Quotation

A quotation is simply a quote of what stock is available at what price. No sale actually takes place, and so no entry type is required.

TAX INVOICE

This document is used to record sales to customers.

Note: Because an actual sale is taking place and inventory is being sold, several accounts will be affected by the sale. The transaction is recorded into the Sales Journal.

The original document name is Tax Invoice. This is required by law if you are selling taxable items.

CREDIT NOTE

This document is used to record returns to you by a customer.

Note: The entry type is the Sales Credit Note Journal.



5.1 INVENTORY SETUP

Before stock (inventory) items can be purchased or sold, the items need to be set up, ie., each item needs to be given a code, and description, etc.

Select the Edit option from the menu bar, and the Inventory option from the pull-down menu. Select the Item file option.


Code: Each inventory item that you add to the system must be assigned an item code. This can be any combination of 15 alphanumeric characters. You use dashes, but not spaces in the item code.

Before creating item codes, think carefully about how you would like your items grouped on the stock reports. In the example used in this course, we have used the first letter of the item codes will be H. The first letter of all software codes will be S, and the first letters of all stationery codes will be ST. This will ensure that, when Pastel stock reports are printed, all the hardware, software and stationery items will be listed together.

Description

This is a description of item. This description will appear on invoices, so it should be as descriptive as possible.

Block

This option is selected only if you do not wish this item to be purchased or sold. It is usually used on obsolete items that should no longer be sold, even though you may have some in stock.

Account Group

This is the account group to which this item belongs. In the stock parameters you set up that the default would be account group 001 – hardware. This can however, be changed when you enter items belonging to another group, by clicking on the down arrow next to this option and selecting another account group.

Discount Type

This default was also selected in the stock parameters. We selected the default Both. This means that you will be able to offer customers both settlement and trade discount on this item.

Barcode

Some companies use bar codes. If your company uses barcodes, this field is used to record the barcode number of the item.

Bin Number

The bin number is the location of the stock item in the store room. This is mostly used by companies that carry a large number of different stock items. Numbering the location of each stock item will help the person trying to find the stock to locate it quickly.

Unit

This is the unit in which this item is sold, i.e. each, packet, box, etc.

Purchase and Sale Tax Type

These options were set up in the inventory parameters. It is the tax type that will be used when purchasing and selling this item. Most stock items bought for resale will attract VAT at the standard rate (01).



Processing Options

These options were also set up in the inventory parameters scree. They can be changed for each inventory item.

RETURN TO RECORDING

RE-ORDER


Supplier Account Code

This is the account code of the supplier who usually supplies you with this item. You will not be restricted to purchasing from this supplier. This information is for record purposes only.

Supplier Inventory Code

This field is used to record the supplier inventory code (which will most likely not be the same code that you use). Some suppliers insist that you use their inventory code when ordering stock.

Minimum

This field is used to record the minimum level to which you will allow the stock of this item to drop before re-ordering.

Maximum

If you enter a maximum value into this field, you will easily be able to see, from the stock reports, if you are overstocking an item.

RETURN TO RECORDING

PRICES

Code H-CPU-ID

Description CPU, 1DISK DRIVE

Selling Price Exclusive Inclusive GP% GP Amount

Retail 3,000.00 3,420.00 100.00 3,000.00

Student 2,800.00 3,192.00 100.00 2,800.00

Wholesale 2,000.00 2,280.00 100.00 2,000.00


Average Cost

This price is worked out automatically by Pastel as stock of this item is purchased.

Last Unit Cost

If you have previously purchased stock of this item, this price will be taken from your manual records.

Retail/Student/Wholesale

When setting up the stock parameters, you entered three prices lists which were to be used for three different types of customer. These fields are used to enter the three different prices for this item. If you enter the exclusive price, the inclusive price will automatically be worked out and vice versa.



FUTURE PRICES

These prices can be typed in over a period of time. They are prices that will be used on a future price list. The current price list can be updated to display these prices at a later date.

Special Prices

Pastel allows you to enter a special price with a start and end date for the special price. When invoicing, if a special price has been recorded, and the invoice date falls in the special period, the special price will be displayed. The special price will be displayed instead of any other price list price.

RETURN TO RECORDING

CUSTOMERS PRICES

This screen is used to record special prices that have been promised to specific customers.

ACTIVITY

No entries can be made on this screen. This screen will automatically be updated as stock of this item is purchased and sold.

EXERCISE

Enter the details of the following stock items:

Code Inv Disc Sup. Sup. Min Max Last Unit Retail Student

Wholesale

& Description Group Type Code Inv Cd Qty Qty Cost Price Price Price

H-CPU-1D 001 Both FUT001 CPU1 5 8 0.00 3000 2800 2000

CPU, 1 DSK DRIVE

H-CPU-2D 001 Both FUT001 CPU2 5 15 0.00 3500 3000 2500

CPU, 2 DISK DRIVES

H-KEY 001 Both FUT001 KEY1 5 15 0.00 120 110 100

KEYBOARD

H-MOUSE 001 Both FUT001 MOU1 5 15 0.00 120 110 90

MOUSE

H-PRO-DOT 001 Both FUT001 DOT1 5 15 0.00 850 750 700

DOT MATRIX PRINTER

H-PR-LASER 001 Both FUT001 LAS1 5 15 0.00 1800 1700 1500

LASER PRINTER

H-SCR-COL 001 Both FUT001 COL1 5 15 0.00 1800 1600 1400

COLOUR SCREEN

H-CCR-MONO001 Both FUT001 MON1 5 15 0.00 1500 1400 1200

RETURN TO RECORDING



Code Inv Disc Sup. Sup. Min Max Last Unit Retail Student

Wholesale

& Description Group Type Code Inv Cd Qty Qty Cost Price Price Price

S-WINDOWS 002 Both TOM001 WIN1 5 8 0.00 700 650 500

MICROSOFT WINDOWS

S-PASTEL-P 002 Both TOM001 PAS1 5 15 0.00 1120 1000 900

PASTEL PARTNER

S-PASTEL-B 001 Both TOM001 PAS2 5 15 0.00 750 700 600

PASTEL BOOKKEEPER

S-PASTEL-P 002 Both TOM001 PAS3 5 15 0.00 1120 1000 900

PASTEL PAYROLL

RETURN TO RECORDING

ST-WIN-MAN 003 Both MOD001 WIN 5 15 0.00 80 75 60

WINDOWS MANUAL

ST-INV-003 002 Both MOD001 INV2 5 15 0.00 160 150 140

2 PART INVOICE PAPER

ST-INV-003 003 Both MOD001 INV3 5 15 0.00 245 225 220

3 PART INVOICES

ST-STATM-2 002 Both MOD001 STA1 5 15 0.00 160 150 140

2 PART STATEMENT PAPER

RETURN TO RECORDING

TIME 004 Both 100 100 100

CONSULTING FEES

TRAVEL 004 Both 50 50 50

TRAVELLING

NB. Please ensure that you enter the last two items as Service Items, not inventory.

RETURN TO RECORDING



5.2 INVENTORY TAKE ON JOURNAL

Now that the stock items have been coded, and descriptions created. You can take on stock of each item.

This invoice is done if you have stock at the time of switching from your manual accounts to Pastel. The stock that you have on hand at this time must be recorded on Pastel as follows:

Select the Process option from the menu bar, and the Inventory Journals option from the pull-down menu. A familiar batch will be displayed.


This Year/Last Year

Select into which year the take on Journals are to be recorded. If you are starting Pastel at the beginning of the financial year, and have a stock count as of the last day of the previous financial year, and would enter these figures into the previous year, as you did the take on balances for the general ledger accounts.

Inventory Code

This is the inventory code of the item being taken on as created in the Inventory Setup screen.

Description

This is a description of the transaction. Usually something to Take On is used.

Date

This is the date on which the items are taken into stock.

Reference

The reference can be anything. Some companies use the initials of the person recording the stock.

Current Quantity

This field will automatically be updated by Pastel, and will show the current number of this item in stock, if any.

Adjust Quantity To

This field is for the quantity of item that you are taking on.

New Quantity

This field will automatically be updated by Pastel. It will be the sum of the values in the previous two fields.

Current Average

This field will also be updated by Pastel, and will display the current average cost of item.

Unit Cost

This is the last cost of the item.

New Average

This field will automatically be worked out by Pastel. It will add the current average to the Unit Cost and divide by two, to find out the new average cost of the item.



GL Account

This is the General Ledger stock adjustment account. (Use the Zoom facility to find this code if you do not know it.)

EXERCISE

Enter the following take on balances into the Inventory Journal. (Notice that not all of the items entered in the Inventory Setup have stock journals. This is because this is presently no stock of that item. The Time and Travel items do not have stock figures.)

Code Description Date Ref. Adjust Unit GL A/c

Qty Cost

H-CPU-1D TAKE ON 01/04/1996 DH 5 1500.00 355

H-CPU-2D TAKE ON 01/04/1996 DH 1 1800.00 355

H-KEY TAKE ON 01/04/1996 DH 6 80.00 355

H-MOUSE TAKE ON 01/04/1996 DH 3 75.00 355

H-PR-DOT TAKE ON 01/04/1996 DH 1 500.00 355

H-SCR-COL TAKE ON 01/04/1996 DH 1 1200.00 355

H-SCR-MONO TAKE ON 01/04/1996 DH 2 1000.00 355

S-WINDOWS TAKE ON 01/04/1996 DH 5 400.00 355

S-PASTEL-BK TAKE ON 01/04/1996 DH 1 450.00 355

S-PASTEL-PAY TAKE ON 01/04/1996 DH 1 800.00 355

ST-INV002 TAKE ON 01/04/1996 DH 7 120.00 355

ST-INV-003 TAKE ON 01/04/1996 DH 5 180.00 355

ST-STATM-2 TAKE ON 01/04/1996 DH 1 120.00 355

This journal is printed and updated in the normal way. Notice that some items have been taken on with a quantity of zero. This enables Pastel to record the default unit price when processing purchase orders. (You will see this later in the lesson.)

RETURN TO RECORDING

5.3 SALES ANALYSIS CODES

If your company employs salespeople who earn commission on their sales, you may consider creating a sales analysis code for each salesperson.

When invoicing, you will be able to allocate each invoice to a salesperson. Pastel will then be able to work out the commission due to each salesperson, according to the commission table set up for that salesperson in the sales analysis code screen.

Select the Edit option from the menu bar, and the Customers option from the pull-down menu. Select the Sales Analysis Codes option.



Sales Analysis Code 001

Description PWV SALES MANAGER

Pay Commission On – Gross Profit

RANGE PERIODIC TARGET AMOUNT COMMISSION%

From 5,000-9,999 5,000 5

From 10,000-14,999 10,000 7

From 15,000 15,000 10


Sales Analysis Code

This is the alphanumeric code that must be created for each salesperson. You could use the salesperson’s initials.

Blocked

Select this option if you do not want this sales analysis code to be used on any further invoices. You may want to do this for a salesperson that leaves the company. The sales history will still be available, but users will no longer be able to record sales against his code.

Description

This is a description of the sales analysis code, usually the salesperson’s name.

Commission

Gross Profit / Sales

Select whether you are going to base this salesperson’s commission on Gross Profit or on Sales.

Range

This will be worked out automatically by Pastel after information has been entered into the next two columns.

Target Amount

The target amount must be entered into this column. The commission recorded in the next column will be earned on any sales or gross profit (depending on the selection that you have made) up to this amount.

Commission %

This is the commission percentage that will be earned on any sales or gross profit on the amount recorded in the previous column.

You can have more than one target and commission amount. Usually, the higher the target achieved, the higher the commission given.

This Year Balances / Last Year Balances

This information is automatically worked out by Pastel as you enter invoices and the salespeople start earning commission



Sales Analysis Details of Second Salesperson:

Sales Analysis Code 002

Description: E. Cape Sales Manager

Based on SALES

Target Amount Commission %

10,000 8%

20,000 12%

RETURN TO RECORDING

5.4 INVENTORY REORDER REPORT

To confirm the effect of the Purchase Orders and Purchases Notes on the current stock situation, print the Inventory Reorder report. You will be printing this report again later in the lesson, once you have processed several purchase orders and purchase notes. Select the View option from the menu bar, and the Inventory option from the pull-down menu. Select the Reorder option. Change the options to correspond to the following:

Click on OK to display this report. The following report should be displayed: Inventory Reorder Report as at 30/04/2008

CODE DESCRIPTION UNIT QUANTITY SALES PURCHASE MINIMUM MAXIMUM QTY TO

ON HAND ORDER ORDER REORDER REORDER ORDER

H-CPU-2D CPU, 2DSK DRV 1.00 0.00 0.00 5.00 15.00 14.00

H-MOUSE MOUSE 3.00 0.00 0.00 5.00 15.00 12.00

H-PR-DOT DOT MATRIX PR 1.00 0.00 0.00 5.00 15.00 14.00

H-PR-LASER LASER PRINTER 0.00 0.00 0.00 5.00 15.00 15.00

H-SCR-COL COLOUR SCREEN 1.00 0.00 0.00 5.00 15.00 14.00

H-SCR-MONO MONO SCREEN 2.00 0.00 0.00 5.00 15.00 13.00

S-PASTEL-BKK PASTEL BOOKKEEPER 1.00 0.00 0.00 5.00 15.00 14.00

S-PASTEL-PAR PASTEL PARTNER 0.00 0.00 0.00 5.00 15.00 15.00

S-PASTEL-PAY PASTEL PAYROLL 1.00 0.00 0.00 5.00 15.00 14.00

ST-STATM-002 2 PART STATEMENT PAP 1.00 0.00 0.00 5.00 15.00 14.00

ST-WIN-MANUAL WINDOWS MANUAL 0.00 0.00 0.00 5.00 15.00 15.00

RETURN TO RECORDING

5.5 PURCHASE ORDERS

Purpose Orders are supplier documents, and are used to place orders for stock with the supplier. By entering items on a purchase order, you WILL NOT be updating the stock figure on Pastel. This figure will be updated only once the stock has arrived and it is entered using a Purchase Note

A Purchase Order is a notification to the supplier that you are ordering stock.

Select the Process option from the menu bar, and the Suppliers option from the pull-down menu. The following information is required before you can begin entering the purchase orders:



Document Selection

This option requires you to select the document you are entering from a list of supplier documents, i.e. purchase order, purchase note, credit note, etc.

Period

This is the period into which the purchase order is to be recorded, i.e. 2 – April.

To continue, click on the Document button.

You are now required to complete the HEADER information:

Process Supplier

Document Type Purchase Order Number PO1 Supplier FUT001 FUTURE

Physical Address Postal Address RANDBURG WATERFRONT P. O. BOX 6900 SHOP 24 RANDBURG RANDBURG 2125

TYPE CODE DESCRIPTION UNIT QUANTITY TAX EXC PRICE 4 Item Code H-CPU-1D CPU, 1 DISK DRV 1.00 01 1,500.00 4 Item Code H-PR-DOT DOT MATRIX 1.00 01 500.00 4 Item Code S-WINDOWS MICROSOFT 1.00 01 400.00 Discount Exclusive 2,400.00 Tax 336.00 TOTAL 2,736.00 Description of Options: Purchase Order Number This will display the number that was recorded as the first Purchase Order number in the Inventory Setup Parameters, i.e. PO1 Supplier Code / Name This is the account code of the supplier from whom you are ordering. Date This is the date on which you are placing the order. Order Confirmation This field is used to record the supplier’s order number. (It can be left blank if you do not know it.) Link To: If you place the order and receive stock at the same time, you are able to create the invoice (purchase note) at the same time that you create the Purchase Order. Pastel will then update the On Hand figure of the stock that you record. It will not be considered as being on order. It will be considered to have arrived and to be in stock. If you are only placing the order (not receiving stock), select the None option. The Purchase Note (invoice), will be recorded later when you receive the stock. Exclusive / Inclusive Select whether you are going to enter the items on this purchase order inclusive or exclusive of VAT. Invoice Discount % If you receive an overall invoice discount from this supplier, record the discount percentage in this field. Settlement Terms This field is used to record any statement terms that the supplier has extended to you, eg. 30 days. Job Code Leave this field blank. Job Codes are explained later in the course.



Exchange Rate If you have chosen not to work with foreign currency, this field will not be available. Address / Message This screen will display the physical address of your company, that is, the address to which the items should be delivered. This screen also enables you to type in a message that will appear on the Purchase Order. Lines You enter the items that you are ordering on this screen. Description of Options: Type Select the type of entry from the available list. For instance, if you are ordering a stock item, you would select inventory. If you wanted to type in a description, you would select Remarks. If you wanted to record a transaction directly to the general Ledger, you would select Financial. (These selections are discussed later in the lesson.) Code This is the item code of the item you are ordering. (Use the Zoom facility to find the code if you do not know it.) Description / Unit These two fields are automatically filled in by Pastel. Pastel displays the details that were recorded in the Inventory Item Setup screen. Quantity This field is used to record the quantity of the item being ordered. Tax This is the tax type to be used for this item. Most purchases made for resale will attract VAT at the standard rate (01). Price This is the purchase price. Pastel will automatically insert the last recorded price, that is, the price that you entered into the take on batch. If the price differs from the default price, you can change it. Disc % This field is used to record a line discount. This discount is a discount received on THIS ITEM ONLY. It will not affect any of the other items on the purchase order. If you receive a blanket (overall) invoice discount, it needs to be recorded in the Invoice discount; it needs to be recorded in the Invoice Discount field in the Header section. Nett Pastel automatically displays the Nett price in this field. The total Exclusive amount VAT amount, and Total will be shown at the bottom of the screen.

RETURN TO RECORDING When you have finished entering the details, click on the Next Document button, to bring up the header section for the next Purchases Order to be created. Print this purchase order before entering the details of the next purchase order. EXERCISE Enter the remaining Purchase Orders according to the details. Purchase Order 2: Purchase Order No: PO2 Supplier Account Code: TOM001 Date: 01/04/2008 Order No: ORD2



Additional details on header screen must be kept as for PO1 Items to be ordered: Type Code Quantity Tax Price 4-Item Code S-PASTEL-PAR 2 01 800.00 4-Item Code S-PASTEL-PAY 2 01 800.00 The Purchase Order total should be R3,648.00

RETURN TO RECORDING Click on New Document and create PO3. Do not print this purchase order. Purchase Order 3: Purchase Order No: PO3 Supplier Account Code: MOD001 Date: 01/04/2008 Order No: ORD3 This Purchase Order is to be recorded INCLUSIVE of VAT. (By doing this, the line items will be displayed inclusive of VAT.) The final total, however, will be the same irrespective of whether the items are entered inclusively or exclusively. The additional details on the header screen must be kept as for PO1. Items to be ordered: Type Code Quantity Tax Price 4-Item Code ST-INV-003 5 01 205.20 4-Item Code ST-STATM-002 6 01 136.80

RETURN TO RECORDING The Purchase Order total should be R1, 846.00. Click on Save. Print this purchase order and the Batch Summary. A Purchase Order batch is not updated because no journal is in use. (No stock figures are actually being updated.) 5.6 PURCHASE NOTES (SUPPLIER INVOICES) Purchase Notes are supplier documents, and are used to receive stock and record the amount owing to the supplier. By entering items on a purchase note, you WILL be updating the stock on hand figure on Pastel. A Purchase Note is a receipt of stock from a supplier. Select the Process option from the menu bar, and the Supplier option from the pull-down menu. The following information is required before you can begin entering the purchase notes: Document Selection This option requires you to select the document you are entering from a list of supplier documents, i.e. purchase order, purchase note, credit note, etc. Period This is the period into which the purchase note is to be recorded, i.e. 2-April. To continue, click on Document button. You are now required to complete the Header information. The Purchase Note Number will display the number that was recorded as the first Purchase Note number in the Inventory Setup Parameters, i.e. PN1 The Supplier Code/Name is the account code of supplier from whom you are receiving stock. The Date is the date on which you are receiving the stock. The Supplier Invoice Number field is used to record the supplier’s invoice number.



The other option on the header screen has the same function as the options of the Purchase Order header screen, with the exception of Link To Purchase Order option. You can use this option to link the Purchase Note to a Purchase Order. For example, if you are receiving stock that you orders on a previously created purchase order, you would link to that purchase order. Once this option is selected, all purchase orders created for supplier are displayed. You then need to select the Purchase Order against which you are receiving the stock. All the items on the Purchase Order will then be copied to the Purchase Note. If any item on the purchase order has not been received (is still outstanding), it needs to be deselected before you click on the Link button and copy the items from the purchase order to the purchase note. If you are receiving only part of the order, you will be able to change the figure in the Quantity column. When you link the Purchase Order to the Purchase Note, you will be given three options concerning the original document (Purchase Order). 1. The original document can be left as it is, that is, with all the items still reflected as being on order. 2. Delete the received items from the order. This will have the effect of leaving only outstanding items on Purchase Order. 3. Delete the entire original document (Purchase Order)

RETURN TO RECORDING Exercise: Record the following Purchase Notes: Purchase Note 1: Purchase Note No: PN1 Supplier Code: FUT001 Date: 02/04/1996 Supplier Invoice No: INV111 Link this Purchase Note to Purchase Order 1. Leave the original document, deleting only the received items. Receive following items: Type Code Quantity Tax Price Inventory H-CPU-1D 1 01 1 500, 00 Inventory H-PR-DOT 1 01 500, 00 The invoice total should be R2 280, 00 Purchase Note 1: Purchase Note No: PN2 Supplier Code: TOM001 Date: 02/04/1996 Supplier Invoice No: INV200 Link this Purchase Note to Purchase Order 2. Remove the entire original document, as all the items are being received.



Receive following items: Type Code Quantity Tax Price Inventory S-PASTEL-PAR 1 01 800, 00 Inventory S-PASTEL-PAY 1 01 800, 00 The invoice total should be R3 648, 00 Link this Purchase Note to Purchase Order 1. Leave the original document, deleting only the received items. Receive following items: Type Code Quantity Tax Price Inventory ST-INV-003 1 01 180, 00 Inventory ST-STATM-02 1 01 160, 00 The invoice total should be R1 026, 00

RETURN TO RECORDING Click on Batch button and print the Batch Summary.

Update this batch by clicking on the Update b button. (This batch has to be updated because stock is being received, meaning that the stock and supplier accounts have to be updated.)

The Inventory Reorder Report should now have changed to update the quantity on hand as follows:

RETURN TO RECORDING

5.7 CUSTOMER INVOICES

Cusomer invoices are customer documents, and are used to record stock sold to customers (the quantity on hand will be reduced), and to record the amount owing you by the customer.

A customer Invoice is a record of stock purchased by a customer.

Select the Process option from the menu bar, and Customers option from the pull-down menu. The following information is required before you can begin entering invoices.



Document Selection

This option requires you to select the document you are entering from a list of customer documents, i.e. Quotation, Tax Invoice, Credit Note, etc.

Period

This is the period into which the invoice is to be recorded, i.e. 2-April.

To continue, click on Document button.

You are now required to complete the HEADER information:

Description of Option:

The Invoice Number will display the number that was recorded as the first Invoice number in the Inventory Setup Parameter, i.e. IN1. The Customer Code/Name is the account code of the customer who is purchasing the stock. The Date is the date on which the stock was sold. The Order Number field is used to record the customer’s order number.

The Link To option can be used to link the invoice to a Quotation or a sales Order. A quotation is a quote to a customer of what stock is available and at what price. A quotation does not affect the inventory accounts, because no stock is actually being sold. You, therefore, do not update a Quotation batch. Your company may or may not use Sales Orders. A sales order is an order placed by your customer. In some companies, the sales order is recorded before the invoice is recorded. Earlier in the lesson, you selected whether or not the inventory should be affected at the time of processing the Sales Order. If you select Yes, the stock level will decrease when the Sales Order is created and not when the invoice is created.

The invoicing and purchase options are very flexible and the documents you use and the procedures you follow will depend on your company policy. You do not have to use all the documents. You may decide to use only Purchase Notes,i.e. only record the stock when it arrives and when you have the supplier invoice, and Customer Invoices, i.e. do not send out quotations or record stock as being sold until you crate the invoice.

The other option on this screen have the same function as the options on the Purchase Order and Purchase Note header screens.

ADDRESS/ MESSAGE

The postal and physical address of the cutomer, as typed in the Edit Cutomer Accounts screen, is displayed here. These addresses can be changed. The Message field is used to type in a message that you want to appear on this invoice. In the Sales Analysis field, you can type in the sales analysis code of the salesperson who is responsible for this sale. Pastel will then calculate commission on this sale according to the details you have set up in the Sale Analysis screen.



Lines

Click in Tab to record the details of the invoice:

Desription of Options:

These are the same as the options in the Purchase Order and Purchase Note batch entry screens.

The price will automatically be displayed once the item code has been accepted. This price will depend on the Price List that you selected when setting up the customer account, that is, either the Retail, Student or Wholesale price list.

This price can be changed; you do not have to accept the default. If you had set up a special price for an item that appears on this invoice, and the invoice date falls into the Special date period, the Special price will be inserted, irrespective of what price list you have as the default.

RETURN TO RECORDING

EXERCISE:

Enter and print the following customer invoices. (You have already entered invoice 1.)

Invoice 1:

The items on this invoice are to be entered Inclusive of VAT.

Invoice No: IN1

Customer: CASH (Use F6 or Zoom facility to create this new account as summarized on page 31. Suppress the printing of a statement for this account, and set the credit limit to 999999999.)

Date: 03/04/1996



Customer Order No:

Because this is a cash sale, you will need to enter the customer’s name and address under the address/Message Tab: R KING, P O BOX 2020,

KENSINGTON,6373.

Invoice Discount: 0.00

Terms: No Terms

Sales Code 002

Sell the following items: Type Code Quantity Tax Price 4 Item Code S-PASTEL-PAR 1 01 1 120,00 4 Item Code S-PASTEL-PAY 1 01 1 120, 00 4 Item Code ST-inv-002 1 01 160, 00 4 Item Code ST-STATM-002 1 01 160,00 The invoice total should be R2 918, 40 The items on this invoice are to be entered Exclusive of VAT. Invoice No: IN2 Customer: SAM001 Date: 10/04/1996 Customer Ref No: ORD2 Invoice Discount: 0.00 Terms: 01 Sales Code: 001

Sell the following items: Type Code Quantity Tax Price 4 Item Code H-CPU-2D 1 01 3 500,00 4 Item Code H-KEY 1 01 120, 00 4 Item Code H-MOUSE 1 01 120, 00 4 Item Code H-SCR-COL 1 01 850,00 4 Item Code H-SCR-COL 1 01 1 800,00

RETURN TO RECORDING The last item on the invoice is a Financial Transaction. This is a transaction that is recorded directly to an account in the general ledger. This function enables you to invoice an item that does not involve stock. Type Code Tax Price Financial 130-Delivery Income 01 40, 00 The invoice total should be R7 330, 20



Invoice 3 The items on this invoice are to be entered Exclusive of VAT. Invoice No: IN3 Customer: PRI001 Date: 10/04/1996 Customer Ref No: ORD3 Invoice Discount: 5 N.B. This is important as you are going to offer a 5% overall discount on this invoice. Terms: No Terms Sales Code: 001

Sell the following items: Type Code Quantity Tax Price 4 Item Code S-PASTEL-BKK 1 01 750, 00 4 Item Code ST-STATM-002 1 01 160,00

RETURN TO RECORDING The last two items on the invoice are for Time and Travel. You can enter them as inventory items because you have created stock codes for them. You are also going to include a description of each of these transactions on the invoice. Enter the Time transaction first as you would a normal stock item: Type Code Quantity Tax Price Inventory Time 2 01 100, 00 Use the next line to enter the description: Type Code Inventory “ After pressing tab to accept the code, a ‘description box’ will be opened allowing you to type a detailed description of this transaction. Although the entire description will not appear on the screen, it will be printed on the invoice. Type: INSTALLING AND SETTING UP PASTEL PARTNER Enter the Travel line as normal inventory for this transaction: Type Code Inventory “ After pressing tab to accept the code, you will be given one line to type in the description. Type: JHB-PTA The invoice total should be R1 256, 28

RETURN TO RECORDING



Invoice 4: The items on this invoice are to be entered Exclusive of VAT. Invoice No: IN4 Customer: CASH Date: 10/04/1996 Customer Ref No: ORD3 Invoice Discount: 0.00 Terms: No Terms Sales Code:

Sell the following items: Type Code Quantity Tax Price 4 Item Code H-KEY 1 01 120, 00 4 Item Code ST-STATM-002 1 01 850,00 4 Item Code H-MOUSE 1 01 120,00 The items on this invoice are to be entered Exclusive Invoice No: Invoice: IN5 Customer: CASH Date: 10/04/1996 Customer Ref No: Invoice Discount: 0.00 Terms No Terms Sales Code:

Sell the following items: Type Code Quantity Tax Price 4 Item Code ST-INV-002 1 01 160, 00 4 Item Code ST-STATM-002 1 01 160 Invoice No: IN3 Customer: PRI001 Date: 10/04/1996 Customer Ref No: ORD3 Invoice Discount: 5 N.B. This is important as you are going to offer a 5% overall discount on this invoice. Terms: No Terms Sales Code: 001

Sell the following items: Type Code Quantity Tax Price 4 Item Code S-PASTEL-BKK 1 01 750, 00 4 Item Code ST-STATM-002 1 01 160,00 The invoice total should be R912, 00. Print this invoice.

RETURN TO RECORDING



No: IN6 Customer: SAM001 Date: 20/04/1996 Customer Ref No: ORD6 Invoice Discount: 5 N.B! Terms: No Terms Sales Code: 002

Sell the following items: Type Code Quantity Tax Price 4 Item Code S-PASTEL-PAR 1 01 750, 00

RETURN TO RECORDING Discount 4 Item Code ST-INV-002 1 01 160, 00 5% 4 Item Code ST-STATM002 1 01 160, 00 As well the overall discount will be given at the bottom of the screen. The invoice total should be R1 542,200. Print this invoice. No: IN7 Customer: CASH Date: 16/04/1996 Customer Ref No: Invoice Discount: 0.00 Terms: No Terms Sales Code:

Sell the following items: Type Code Quantity Tax Price 4 Item Code ST-WIN-MANUAL 1 01 80, 00 The On Hand level in the stock reports for this item will read -1. The invoice total should be R91, 20. Print this invoice.

RETURN TO RECORDING It is necessary to print all the invoices. You can print only one copy of the original invoice. If you attempt to print an additional copy, the words Copy Tax Invoice will be printed. By law, you are only permitted to print only one original tax invoice. It is necessary to print the Batch Summary and then Update. You are required to update, because stock is being sold, and the stock accounts need to be updated. Also, the customer accounts need to be updated with the amount now owing by them. 5.8 ADDITIONAL INVOICING FUNCTIONS Creating a new customer account whilst invoicing You can create a new customer account whilst invoicing. When you are prompted for the Customer Account Code, do one of the following: 1. Press F5 or click on the magnifying Glass to display the list of customers and then click on the ADD button; or 2. Press F6.



Enter method will display the Edit Customer Account screen. You can then enter the details of the new customer. When you have finished, click on the tick and then on Close to return to the invoice entry screen. Additional Type of Transactions Financial Transaction This type of transaction does not involve stock. It is a sale that directly affects a general ledger account, i.e. Delivery Income In the Type field, click on the down arrow and from the selection list, select the Financial option. Press tab and type the general ledger account number in the Code field. (Use the Zoom facility if you do not know the account number.) Complete the transaction as normal. Remark/Description You can include a description of an item by doing the following: 1. In the Type field, select the Remarks option. 2. In the Code field, type two apostrophes(‘’) to open a description box into which you can type as detailed description. This description may not appear on the screen in full, but it will be printed. Alternatively, you can type one apostrophe (‘) which allow you to type in just one line of description. Line Discount You can include a line discount for an item, by clicking in the Discount coulumn next to the item concerned, and typing in the discount amount. The discount will affect that item only. None of the other items on the invoice will be affected.

RETURN TO RECORDING 5.7 CUSTOMER CREDIT NOTES Customer Credit Notes are used to credit a customer account. A credit note is usually created to record stock that is being returned to you. This stock could have been over-ordered, or be faulty, etc. Stock items entered on a credit note will increase your stock-on-hand figure. Select the Process option from the menu bar, and the Customers option from the pull-down menu. The following information is required before you can begin entering the credit note. Document Selection This option requires you to select the document you are entering from a list of customer documents, i.e. Quotation, Tax Invoice, Credit Note, etc. Period This is the period into which the credit note is to be recorded, i.e. 2-April. To continue, click on the Document button. You are now required to complete the HEADER information. The Credit Note Number will display the number that was recorded as the first Credit Note number in the Inventory Setup Parameters, i.e. IC1. The Customer Code/ Name is the account code of the customer to whom you are issuing the credit. The Date is the date on which you are creating the note. The Order Number field is used to record the original invoice number. If the customer is an open item customer, the credit note must be allocated against an invoice. When you are promted for the Order Number of an open item customer, an invoice allocation table will automatically be displayed.



You must select, from this table, the invoice against which the credit note is to be allocated. The other options on the header screen have the same function as the options of the previously created documents. The credit note must have the same options as the invoice against which it is being allocated. For instance, if a discount was given on the invoice, then the same discount must be given on the credit note. ADDRESS/MESSAGE The customer’s postal and delivery address is recorded, and can be changed on this screen. The message field is used to record a message that you want printed on the credit note. The Sales Analysis Code field is used to record the Sales Analysis code of the sales person who is responsible for this credit. This is important, because if a sales person earned commission on the original sale, this commission must now be reduced to take into consideration the fact that stock is being returned, and the original amount of the sale reduced. Lines The options on this screen are the same as for the previously created documents: Exercise Credit Note: IC1 Customer: SAM001 Date: 27/04/96 INV No: INV6(Select this option from the list of outstanding invoices for this customer.) Invoice Discount: 5 Analysis: 002 The customer returned the following items: Type Code Quantity Tax Price Discount 4 Item Code ST-INV-002 1 01 160, 00 5

RETURN TO RECORDING Because Credit Notes affect the stock and customer accounts, it is necessary to print the Batch Summary and Update the batch. 5.10 STOCK REPORTS The following reports will show the stock movements after you have processed several supplier and customer document. DETAILED LISTING This report will give the static information for each item, i.e. account group, reorder level, etc. Select the View option from the menu bar, and the Inventory option from the pull-down menu. Select the Listing option, and then the Items option. Ensure the options correspond to those shown below and then click on OK print the report.



COST REPORT Select the View option from the menu bar, and the Inventory option from the pull-down menu. Select the Inventory Valuation option. Ensure the options correspond to those shown below and then on OK to print the report.

RETURN TO RECORDING REORDER REPORT Select the View option from the menu bar, and the Inventory option from

the pull-down menu. Select the Reorder Option. Ensure the options correspond to those shown below and then click on OK to print the report:

PRICE LIST

RETURN TO RECORDING PRICE LIST Select the View option from the menu bar, and the Price Lists option

from the pull-down menu. Select the Item Based Prices option. Ensure the options correspond to those shown below and then click on OK to print the report:



Quantity Report Select the View option from the menu bar, and the Inventory option

from the pull-down menu. Select the Quantities option. Ensure that the options correspond to those shown below and then click on OK to print the report:

5.11 ADDITIONAL PRINT FUNCTIONS When you display a report on the screen, several icons will be displayed

at the bottom of the screen which allows you to carry out various functions:



6.1 SYSTEM NAVIGATOR During you have been using the menu system to select Pastel activities.

The System Navigator offers you an alternative method of selecting Pastel functions. The System Navigator shows the options in graphical format and in some areas is more detailed than the pull-down menus.

To display the System Navigator, click on the System Navigator button on the icon bar.

The top row of buttons allows you to select an accounting area. The bottom row of buttons allows you to select an activity. In the centre, Pastel displays detailed options for the area and activity you have selected.

RETURN TO RECORDING 6.2 PURCHASE NOTES – APRIL To receive stock still outstanding from previously created Purchase

Orders, do the following: Select the Process option from the menu bar, and Suppliers option from

the pull-down menu. Select the Purchase Note option from the Document Selection list. Create the following two Purchase Notes:

N.B. Ensure that you link each Purchase Note to a Purchase Order. Purchase Note 4: Purchase Note Number: PN4 Supplier Code: FUT001 Date: 15/04/1996 Supplier Invoice Number: INV234 Link to Order: PO1 Receive the following item: 1 x Microsoft Windows (R400, 00) Select to Remove Purchase Order. (All the items on this Purchase

Order have now been received, and the Purchase Order can be removed.) The total of this purchase Note should be R456, 00

Purchase Note 5: Purchase Note Number: PN5 Supplier Code: MOD001 Date: 15/04/1996 Supplier Invoice Number: INV888 Link to Order: PO3 Receive the following items: 2 x 3 part invoice paper (R205, 20) 3 x 2 part statement paper (R136, 80) Select to Remove Purchase Order. (All the items on this Purchase

Order Have now been received, and the Purchase Order can be removed.) The total of the Purchase Note should be R820, 80.

6.3 CASH BOOK RECEIPTS FOR APRIL This information will be entered from your deposits slips. All the entries on

the same deposit slip, MUST be given the same reference. Transaction 1:



On 3 April 1996, deposited money from a cash sale – R2 918, 40. Deposit slip no. DEP4. Description: PAYMENT

NOTE: Now that you are running live invoicing and stock control, you do

not have to post your cash sales to specific sales accounts in the cash book. This was done at the time of invoicing. When you created the items, you linked each one to an account group, which in turn was linked to a sales account. This means that, in your cash book, you need to make only one entry to deposit the cash from the sale.

Transaction 2: On 10April 1996, deposited money from a cash sale – R1242, 60.

Deposit slip no.DEP5. Description: PAYMENT Transaction 3: On 15April 1996, deposited money from a cash sale – R912, 00.

Deposit slip no.DEP6. Description: PAYMENT RETURN TO THE RECORDING

Transaction 4: On 27April 1996, deposited money from a cash sale – R91, 20. Deposit

slip no.DEP7. Description: PAYMENT

RETURN TO THE RECORDING On the same deposit slip, Mr. Samson paid up his March invoices – R7

065, 00. (Invoice numbers 1494, 1495, 14 96, 1497) Mr Samson’s account is run on an open item basis, so once the transaction has been completed, the open Item Allocation screen will be opened, and you will need to click on the Mark For Payment button and to allocate the payment to the relevant invoices.

The total for deposit slip number 7 is R7 156, 20. Use the up arrow to check this.

Transaction 5: On 28 April 1996, deposited R6 000, 00 received from Mr James Price

in full settlement of his account (R6 136, 00). This means that a discount of R136, 00 needs to be recorded. This transaction requires two entries:

Entry 1 (deposit) Entry 2 (discount) Period 2 2 Date 28/04/96 28/04/96 GCS C C Account PRI001 PRI001 Reference DEP8 DISC1 Tax 00 01 Inclusive 6000, 00 R136, 00**(see note) Cost Code Description PAYMENT DISCOUNT

ALLOWED

**NOTE: After typing the reference of the discount, click on the Line Commands

Tab and then click on the Discount button. A message will be displayed: TRANSACTION MARKED AS DISCOUNT.



The tax type for the discount transaction must be 01 (standard rate)as the taxable portion of the discount needs to be reversed. The discount account (discount allowed) will be debited with the exclusive amount. The VAT account will be debited with the amount of VAT. The customer account (PRI001) will be credited with the full amount of the discount, thus reducing his outstanding balance.

To see how Pastel will post this transaction, click on the preview Tab, and

then click on the PREVIEW ALL LINES button.

RETURN TO THE RECORDING 6.4 CASH BOOK PAYMENTS FOR APRIL The following cheque payments must be recorded for April: Transaction 6: On 1 April 1996, cashed cheque no. 01249 for Wages (account code

390). R500, 00. No VAT is payable on wages. Transaction 7: On 4 April 1996, cashed cheque no. 01250 for Petty Cash (account

code 390). R500, 00. No VAT is payable on petty cash. Transaction 8: On 4 April 1996, cashed cheque no. 01251 for Receiver of Revenue for

(account code 350/002).R350, 00. No VAT is payable on PAYE. Transaction 9: On 8 April 1996, cashed cheque no. 01252 to pay Waltons Stationers

for new letterheads (account code 320). R79, 80 Inclusive. (VAT Code 01) Transaction 10: On 8 April 1996, cashed cheque no. 01253 to pay Wages (account code

390). R500, 00. No VAT is payable on wages. Transaction 11: On 12 April 1996, used cheque no. 01254 pay Advertising Co. for a

magazine advertisement. (Account code 220). R2 850, 00. No VAT is claimable. Transaction 12: On 15 April 1996, cashed cheque no. 01255 to pay Wages (account

code 390). R500, 00. No VAT is payable on wages. Transaction 13: On 20 April 1996, cashed cheque no. 01256 to pay Rental Agency for

the monthly rent (account code 335).R3 420, 00 Inclusive. ( VAT Code 01) Transaction 14:



On 25 April 1996, used cheque no. 01257 to pay Miss Grant her salary Wages (account code 350/001).R1 650, 00. No VAT is payable on salaries.

Transaction 15: On 25 April 1996, used cheque no. 01258 to pay FURNITURE

SUPPLIERS for a new typist chair (account code 600).R742, 00. *Inclusive. Because this is a capital item purchase, use No VAT Code 02.



6.5 THE BANK RECONCILIATION BANK STATEMENT

APRIL 1996 01/04 Balance Brought Forward 26 210.68 -26 210.68 Insurance Company* 100.00 - 26 110.68 Stannic Photocopier* 85.00 - 26 025.68 CHQ1240 684.00 - 25 341.68 03/04 Deposit 2 918.40 28 260.08 Cash Deposit Free 6.60 - 28 253.48 CHQ01245 416.10 - 27 837.38 CHQ01246 4 000.00- 23 837.38 04/04 CHQ01247 3 200.00- 20 637.38 06/04 Wesbank Lease* 1 300.00- 19 337.38 09/04 CHQ01243 95.00 - 19 242.38 CHQ01249 500.00 - 18 742.38 CHQ01250*refer to recording 568.00 - 18 174.38 10/04 Deposit 1 242.60 19 416.98 Cash Deposit Fee 1.40 - 19 415.58 CHQ01252 79.80 - 19 335.78 CHQ01253 500.00 - 18 835.78 15/04 Deposit 912.00 - 19 747.78 16/04 CHQ01255 500.00 - 18 247.78 CHQ01244 285.00 - 19 962.78 26/04 CHQ01257 1 650.00- 17 312.78 27/04 Deposit 7 156.20 24 468.98 Cash Deposit Fee 1.00 - 24 467.98 28/04 Deposit 6 000.00 30 467.98 30/04 service Fee 72.00 30 395.98 Copying Recurring Batch Entries to Normal Batch To copy the transactions from the recurring batch to the normal batch, do

the following: - Click on the Batch BUTTON - Select Postdated/Recurring Batch Entry The period should be displayed as 2, the month as 04, and the year as

1996. - Click on OK. - Click on Yes to confirm transfer. - A message 3 items transferred should be displayed. Click on

OK. Do the following to enter transaction for Bank Charges into Normal

Batch: You now need to add a transaction in the Payments Cash Book (normal

batch) for the Bank Charges. To do this, do the following: - Calculate the bank charges for the month (cash deposit fees and

bank charges) . The amount should be R81,00. - Position the cursor on new transaction line and post this amount

to account code 230 – bank charges. Do not record VAT. The Payments Cash Book total should be R12 716.80



RETURN TO THE RECORD



6.6 APRIL RECONCILIATION Special instructions to reconcile cheque no.01250 The amount on the statement and the amount in the Pastel Payments

Cash Book do not correspond. This error needs to be rectified, before this item can be reconciled. To correct the error, do the following:

Open the Cash Book screen and the Bank Reconciliation screen simultaneously. Any changes that you make in the batch entry screen will immediately be updated I the bank reconciliation screen, and any items that are reconciled in the reconciliation screen will immediately be shown as reconciled in the batch entry screen.

To switch between the batch entry screen and the bank reconciliation, click on the Windows option on the menu bar, and then click on the option for the required window.

For this exercise, display the batch entry screen, and select the Payments Cash Book from the Entry Types list. Change the amount of cheque 1250 to R568. Re-display the bank reconciliation by selecting the bank reconciliation option from the Windows pull-down menu. Cheque 1250 will now display the correct amount and will correspond to the bank statement. This item can now be reconciled.

Reconciling from the batch entry screen Items can be reconciled directly from the batch entry screen by clicking

on the item to be reconciled and then pressing F7. A message, “Transaction marked as reconciled”, will be displayed. A tick will appear in the reconciled column of all items that are reconciled. To unreconcile an item, click in the transaction line of the item to be unreconciled and press F7. A message, “Transaction marked as unreconciled”, will be displayed. The tick will be removed from the reconciliation column.

Reconciling the April bank statement Work down the bank statement and tick off, in the reconciliation screen,

all the items that appear on the bank statement. (Some entries will not appear on the bank statement. These will be cheques that have not yet gone through the bank. They will appear on the May bank statement. )

To print the Bank Reconciliation, click on View Tab, and then click on Print.

6.7 PETTY CASH PAYMENTS – APRIL The following Petty Cash payments need to be entered into the Petty

Cash Payments Journals. Select the Process option from the menu bar, and the Cash Book option

from thr pull-down menu. Select the Petty Cash Payments from the Cash Book. Use the following defaults for the petty cash entries: Period 02 Date 30/04/1996 Reference APRIL Description PETTY CASH Transaction 16: Refreshments for staff – R165,00 (Account Code 325 – No VAT) Petrol for the month – R120, 00 (Account Code 310/001 – No VAT) Stationery for the office – R285, 00 (Account Code 320 – VAT Code - 01) Postage for the month – R45, 00 (Account Code 315 – VAT Code - 01) Paid casual wages – R250,00 (Account Code 390 – No VAT) Bought globes for office lights R35, 00 (Account Code 340/001 – VAT

Code 01)Batch Total : R900, 00



6.8 THE VAT CONTROL ACCOUN The VAT 201 form is a form the Receiver of Revenue which has to be

filled in by every company that is registered for VAT. The VAT report summarises the VAT inputs and the VAT outputs. The difference between these two amounts will result in either a value that is due by you to the Receiver of Revenue, or due by the Receiver of Revenue to you.

In order to fill in this report, you require two reports: VAT Control Account Tax Type Report To print the VAT Control Account, do the following: Select the View option from the menu bar, and the General Ledger

option from the pull-down menu. Select the Transactions option and then the Detailed Ledger option.

6.9 TAX TYPE REPORT This is a detailed report on the inputs and outputs for each tax type. You

are going to print the detailed report, and the summary report. These report. These reports are required to complete the VAT 201 form.

To print the detailed report, do the following: Select the View option from the menu bar, and the General Ledger

option from the pull-down menu. Select the Tax option, and then the Tax Type Report option.

6.10 THE VAT 201 FORM From the Tax Type report, take the following figures: Total sales (including VAT) 38 051.48 Block 1 Total Output Tax (Sales) 4 672.99 Block 4 Total Output Tax (Sales) 4 672.99 Block 13 VAT on Capital Item Purchase 91.00 Block 14 VAT on Other Items Purchased 2 144.60 Block 15 Total Input VAT (Blocks 14+15) 2 235.60 Block 19 Difference between total inputs And total outputs 2 437. 39 According to the above information, you have invoiced out more VAT than

you have spent. This means that the figures of R2 437.39 is due by you to the Receiver of Revenue.

The blocks refer to the block number on the VAT 201 form. (See the next page)



NOTE: The final figure of R2 437.39 corresponds to the VAT figure on the VAT Control Account.



You would now, normally, record a cheque in the Payments Cash Book

Journal for the amount of R2 437.39, debiting the VAT Control Account – 850. This will make the balance of this account zero, and you can begin processing transactions for the next two months.

RETURN TO THE RECORDING 6.11 DRILL DOWN The Drill Down facility allows you to work backwards from a balance to

see how the balance was made up. Exercise: Use the Drill Down facility to work backwards from the Accounts

Receivable account to the line items on the invoice. - Select the Drill Down option from the View pull-down menu.

(Leave the starting period as 1 and the ending period as 12.) - Click on the begin Drill Down button. - From the balance sheet accounts on the left of screen, double

click on the Accounts Receivable option. - Double Click on the Accounts Receivable item which is now

displayed on the right of the screen with the description ‘customer’. - Each customer, with the individual balances, is now displayed.

Double click on the Samson item. The Customer screen is now displayed. Double click on April balance. - All the invoices making up the April balance for Samson are now

displayed. Double click on invoice number 6. The items making up this invoice are now displayed.

Any general ledger, customer, supplier or inventory account can be

viewed in this way by using the drill down facility.


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