Session 5

Setting up Customers
Intended Learning Outcomes
At the end of this session, you should be able to;
1. Explain Interactions between accounts receivable and other sections in Sage 50;
2. Describe how to set customer defaults;
3. Describe how to set statement and invoices defaults relating to customers;
4. Explain how to create sales taxes;
5. Explain how to create customer ledger; and
6. Explain how to record customer beginning balances.

5.1 Introduction

Accounts Receivable monitors the products and services sold to customers and the money
received from customers. You can set up both default and specific customer information. Default
information is good for all of the customers you deal with, but each customer will need special
treatment too. When transactions are posted in Accounts Receivable, the journals are updated.
The journals in turn update the General Ledger. The interaction between Accounts Receivable
and the other sections in Sage 50 is illustrated in the Figure 5.1:

Figure 5.1: The interaction between Accounts Receivable and the other sections in Sage 50

Accounts Payable
Account Receivable

Expenses Tickets Time Tickets

Inventory

Job Cost
Journal

General Ledger

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5.2 Entering Customer Defaults

Before transactions are posted to accounts payable module in Sage, it is recommended to enter
default information relating to customers. To access default information relating to customers,
the following steps can be followed:

Steps:
Click maintain in the menu bar - Select Default Information - Click Customers
Or

Click Customers and Sales Navigation Bar – Select Customers Navigation Center –
Click Set Up Customers Defaults

5.2.1 Customer Defaults Window

Once you follow the above steps relating to default information of customers, you will see the
Customers Defaults Window. The Figure 5.2 shows the Customers Defaults Window. The
Customer Defaults window stores basic information that applies to most of your customers and
sales transactions. Customer Defaults window consist of 5 tabs: Terms and Credit Tab, Account
Aging, Customer Fields, Finance Charges, and Pay Methods.

Figure 5.2: The Customers Defaults Window

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a) Terms and Credit Tab

This is the first tab in the customer default window. Terms and Credit Tab controls the standard
payment terms for invoices sent to customers, establishes the General Ledger discount account
number and discount allowance percentages. You can also set the default credit limit that applies
to all customers. In addition, you can set a default credit status that will control how Sage 50
handles your customers. Changes made on this window affect all customers using standard
terms. If certain customers have special payment terms, you can modify their records
individually in Maintain Customers. This will ensure that they receive their special terms,
without upsetting the defaults that all existing and new customers will receive.

b) Account Aging Tab

The Account Aging tab accesses aging information. The information in these fields is used to
age sales invoices. You can choose to age your customer invoices by invoice date or by due
date and set up aging categories. However you set these up, you’ll be able to see at a glance
what invoices are due, when; just look at the Sage 50 Aged Receivables Report. Changing these
categories will automatically update the reports.

c) Custom Fields

You may have additional information that you keep on your customers, such as additional
contact people or additional phone numbers, e-mail addresses, and so on. If so, you can set up
custom fields to track this information. Then, when you set up an individual customer, on the
General tab of the Maintain Customers window, you could enter the appropriate information for
that customer. Sage 50 allows you to customize up to five additional fields for maintaining
information about your customers.

Activity 5.1
The management of Ceylon Fashion (Pvt) Ltd. decided to set following default information of its
customers.
Stranded Terms (Due in number of days) 2%, 15, Net 45 Days
Credit Limit Rs 500,000
Credit Status Notify Over Limit
GL Sales Account 4000-FS
GL Discount Account 7040-FS (Create a new account as Discount
Allowed.)
Account Aging Categories (Based on Invoice 0 to 45 days; 46 to 60 days; 61 to 90 days; Over 90
Date) days.
Additional Fields Second Contact, Reference

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d) Finance Charges

If you assess late charges on your customers’ invoices, you want to access this tab first. Here,
you will set up the terms and percentages for calculating finance charges. You can also specify
whether or not these finance charges are compounding. Enter your defaults here. If you have
customers that you don’t want to bill finance charges, you can modify their records on the
Payment and Credit tab in Maintain Customers.

Activity 5.2
The management of Ceylon Fashion (Pvt) Ltd. decided to charge 0.5% finance charge on
invoices which are 30 days overdue up to Rs 100,000. Further, on balance above that, customers
will be charged 1% finance charge on overdue balances. Minimum finance charge is to be set as
Rs 100.

The account to collect finance charges on customers is ‘ID 4250-FS Late Interest Income’ (create
a new account). Finance charges should be appeared as later charges in statements. Further, it
requires printing default finance charge warning message on invoices.

You are required to enter above information in the finance charges section in the Sage.

e) Pay Methods

Here, you set up the different types of payments that you receive from your customers, anything
from cash to credit card. Sage 50 gives you ten options so that you can receive money in a
variety of ways. Then, when you enter your customers’ payments, you can specify what type of
payment it is. The payment method can be displayed in some reports and forms.

Activity 5.3
Set payment methods of customers of Ceylon Fashion (Pvt) Ltd as follows;

Cash, Cheques, Visa, Master Cards

Further, you are required to assign Deposit ticket IDs when receipts are deposited.

5.2.2 Statement and Invoice Defaults

Sage 50 provides a number of options and variables that you can use to control the printing of
customer statements and dunning messages on invoices. These options can only be set at the
company level; you cannot set them at the individual customer level. To access statement and
invoice defaults, the following steps can be used. The Figure 5.3 shows the Statement/ Invoices
Default Window.

Steps:
Click Maintain- Select Default Information- Click Statement/ Invoices

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 Figure 5.3: Statement/ Invoices Default Window

a) Statement Print Options

On this tab, you can set options that help you print statements the way you want. These include
such options as when to print statements with zero or negative balances, and how long invoices
must be overdue before they will generate statements. When you are ready to print statements,
select Reports & Form sin the menu bar, Forms, Customer Statements. Select the form you
want from the Forms list on the Select a Report or Form window. Click Preview and Print.
When printing the statements, Sage 50 will use the default options you set.

Activity 5.4
Ceylon Fashion (Pvt) Ltd decided to use default Statement Print Options available in Sage except
number of days to show past due invoices in statements. Accordingly, 10 days past due invoices
should be appeared in statements. Set the relevant default information.

b) Dunning Messages Tab

You can use this tab to create short notices that will notify customers on invoices if they have
other invoices that are overdue by a certain number of days. In this way, you can have Sage 50
automatically remind your customers of overdue bills.

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Activity 5.5
Ceylon Fashion (Pvt) Ltd decided to use following messages on statements.

Level Criterion Message

1 Less than 0 days overdue Thanks for your business
2 1 to 45 days overdue You may have forgotten this bill. Thanks for your attention
3 46 to 60 days overdue Please attend to this payment as soon as possible
4 All other invoices Please attend to this payment immediately

5.3 Sales Taxes

Before you can bill your customers, you may need to set up your sales taxes. Once these are set
up, you can make a particular sales tax part of each customer’s record and automatically call up
the correct sales tax when you create orders, bills, and so forth, for that customer.

To add or edit sales taxes, the steps are as follows;

1. Click Maintain in the menu bar- select Sales Taxes

Or
1. Click Customer & Sales Navigation Bar– Click Sales Taxes Navigation Center

Then you will see the Set up Sales Window, which is shown in the Figure 5.4. The Set up Sales
Window is used to create a new sales tax item, edit, delete or view an existing tax item.

Figure 5.4: Set up Sales Window

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To create a new sales tax item,

Select Set up a new sales tax in the Set up Sales Window (Figure 5.4) – Click Next.
Then, you will see Set up New Sales Tax Window which is shown in the Figure 5.5.

Figure 5.5: Set up New Sales Tax Window

In the Set up New Sales Tax Window (Figure 5.5), following questions are asked.

• What is the total rate that you will charge? Enter the total of the tax rate. If this tax
rate is made up of, for instance a state tax of 4% and a county tax of 2%, enter 6 here. If
the rate is based, in whole or in part, on a formula, leave this field blank.

• How many individual rates make up this total rate? Enter here the number of agencies
that will make up this tax rate. If this tax rate is made up of, for instance, a state tax and a
county tax, enter 2 here.

Click Next. Then, you will see Add Sales Tax Agency Window which is shown in the
Figure 5.6.

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 Figure 5.6: Add Sales Tax Agency Window

In the Add Sales Tax Agency Window (Figure 5.6), use the following steps.

Steps:
Enter Sales Tax agency ID– Enter Sales Tax Agency Name– Select How a Sales Tax
need to be calculated–Enter the Rate– Select the Account Code – Click Next

Activity 5.6
Enter following information relating to the sales tax (VAT) of Ceylon Fashion (Pvt) Ltd.

Sales Tax agency ID IRD

Sales Tax agency name Inland Revenue Department
Calculation method By single rate
Rate 15%
Account Code 2150-FS- VAT Control Account (Create a new
account)

The next window is Sales Tax Entered Window, which is shown in the Figure 5.7.

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Figure 5.7: Tax Entered Window

In the Sales Tax Entered Window (Figure 5.7), use the following steps.

Steps:

➢ Enter Sales Tax ID– Enter Sales Tax Name- Select Do you charge sales tax on
freight?(Yes/No) – Click Finish

Activity 5.7
Enter following information relating to the sales tax (VAT) of Ceylon Fashion (Pvt) Ltd.

Sales Tax ID VAT15

Sales Tax Name Value Added Tax
Do you charge sales tax on freight? Yes

5.4 Creating Customer Ledger

After entering customer default information and sales tax information, the next step is to enter
each customer. As you add customers, you can use the default information or change the
information for specific customers. To add a customer, Maintain Customers/ Prospects Window

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is used and it’s shown in the Figure 5.8. Maintain Customers/ Prospects Window consists five
tabs, namely General, Contacts, History, Sales Info and Payment& Credit. The steps are as
follows:

Steps:
Click Maintain in the menu bar – Select Customer/Prospects
Or
Click Customer & Sales Navigation Bar – Click Customer Navigation Center – Select
New Customer

Figure 5.8: Maintain Customers/ Prospects Window

a) General Tab

The General tab is used to add, edit and view information about your customers.

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b) Address Tab

You can use the Addresses tab to keep track of shipping addresses for each customer. You
can have a separate sales tax for each address. The Figure 5.9 shows the Contacts Tab in the
Maintain Customers Window.

Figure 5.9: The Contacts Tab

c) The History Tab

The History tab offers a view of sales, receipts, last invoice, and payment information. Sage
50 updates this window each time you enter a transaction for a customer. The Figure 5.10
shows the History Tab in the Maintain Customers Window. You can enter historical
information when creating a customer, but once the record is saved, you cannot make
changes.

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 Figure 5.10: The History Tab

d) The Sales Info Tab

Select the Sales Info tab to view sales information assigned to the customer. This tab is used
to enter sales reps, shipping methods, pricing levels, and General Ledger sales accounts for
customers. The Figure 5.11 shows the Sales Info Tab in the Maintain Customers Window.

Figure 5.11: The Sales Info Tab

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e) The Payment and Credit Tab

This tab contains default payment information for the customer that will be used on the
Receipts window. Also, you can customize the payment terms and credit status for a
customer. To override the default terms, select Customize terms for this customer from the
Terms and Credit drop-down list. The Figure 5.12 shows the Payment & Credit Tab in the
Maintain Customers Window.

Figure 5.12: The Payment & Credit Tab

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Activity 5.8
Create following customer records.
1 2 3 4 5 6
Customer GRM001 SUP001 DIA001 SMA001 LOT001 TA001
ID
Name Groom Super Diana Dress Smart You Lotus House Textile
Fashions Textiles Point Fashions Academy
Billing No. 230 No. 45 No. 64 No. 325 No. 705 No. 90
Address Kalutara Colombo 5 Chilaw Negombo Matara Colombo 3
Sales Tax VAT15 VAT15 VAT15 VAT15 VAT15 N/A
Customer Clothing Clothing Clothing Clothing Clothing Training
Type
Telephone 0112343556 0114540458 0773343331 0113433442 0112233334 011801236
Fax 0112343557 0114540459 - 0113433443 0112233335 011801237
E-mail groom@gmai sup@slt.lk diana@gmail Smart lotus@yaho Tex@aca.lk
l.com .com You@gmai o.com
l.com
Web www.groom. www.super.l - - www.lotus.l www.texaca.
com k k com
Contact Mr Nadun Ms Dasuni Mr. Wishwa Mr Kalum Mr Isuru Ms Jayani
Person
Account HNB 5102 BOC 2605 NDB 3400 BOC 1905 HNB 7890 HSBC 6745
No.
Shipping Billing No.105, Billing No. 202 Billing N/A
Address Address Nugegoda Address Katunayake Address
GL Sales 4000-FS 4000- FS 4000- FS 4000- FS 4000- FS 4050- FS
Account
Shipping Courier Customer Customer Customer Customer N/A
Method pickup pickup pickup pickup
Price Level Normal Normal Normal Special Normal N/A
Terms & Default 1%, 10, Net C.O.D Default Default 3%, 20, Net
Credits 30 Days No Finance 45 Days
Credit Limit - Charge Credit Limit -
Rs 300,000 Rs 600,000
Finance No Finance
Charges - Charges
Default

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5.5 Entering Begging Balances to Customers.

Beginning balance invoices are customer invoices that are outstanding as of the date you began
to use Sage 50. Since these bills were recorded to the appropriate accounts in your previous
accounting system, they should not affect the General Ledger in Sage 50. The balance of the
Accounts Receivable account in the General Ledger should equal the total amount of the
customer beginning balances as long as no other receivables transactions have been made.
How to enter the begging balances to Customers?
Once all customers are created in the system, you can record their beginning balances. To enter
beginning balances of customers, you need to open Maintain Customers window (as depicted in
the Figure 5.8).

The steps are;

i. Click Maintain in the menu bar – Select Customer/Prospects

Or
ii. Click Customer & Sales Navigation Bar – Click Customer Navigation Center –
Select New Customer

In the Maintain Customers Window;

iii. Go to History Tab – Click Customer Begging Balances Button (Then you will
see the Customer Beginning Balances Window as depicted in the Figure 5.13).

In the Customer Beginning Balances Window;

iv. Go the Customer Balances Tab - Select the Vendor.

v. Enter customer Invoice Number – Select Invoice Date – Enter Purchased

Order Number (If any) – Enter Invoice Amount – Select Accounts Receivable
Account Number

Repeat Steps iii and iv until you enter balances of all customers.

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Figure 5.13: Customer Beginning Balances Window

Activity 5.9
Enter following balances to customers.

Customer ID Invoice No. Date PO No. Amount (Rs)

GRM001 1345 14.11.2021 PO154 115,000
1348 16.12.2021 PO155 85,000
1350 28.12.2021 PO158 27,000
SUP001 1300 12.12.2021 PO140 108,000
1330 31.12.2021 PO145 45,000
SMA001 1290 08.12.2021 PO120 122,000
LOT001 1298 25.12.2021 PO125 148,000

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