Blog
Monthly posts going deeper into specific nominal codes — the debits, the credits, and a worked example of how the entry actually flows.
Freehold vs leasehold property: codes 0010 and 0011
What separates the two Fixed Assets property codes, how VAT can land on a leasehold purchase, and why one gets amortised and the other usually doesn't.
July 2026VAT control accounts explained: codes 2200, 2201 and 2202
Why VAT sits across three different nominal codes, how they relate to each other, and a worked example of a quarter's VAT return.
August 2026Plant and machinery depreciation: codes 0020 and 0021
How the asset cost code and its accumulated depreciation contra-asset code work together.
August 2026Office equipment depreciation: codes 0030 and 0031
The cost code and accumulated depreciation code for office equipment, with a worked example.
August 2026Furniture and fixtures depreciation: codes 0040 and 0041
How furniture and fixtures depreciate on the books, and how the two codes link together.
August 2026Motor vehicles depreciation: codes 0050 and 0051
Tracking a vehicle's cost against its accumulated depreciation, with a worked example.
August 2026Stock, work in progress, finished goods and raw materials: codes 1001-1004
How goods move through four Current Assets codes as they're worked on and sold.
August 2026Debtors, sundry, other and inter-company: codes 1100, 1101, 1102 and 1104
Four ways Sage splits money owed to a business, and why inter-company debt gets its own code.
August 2026Prepayments explained: code 1103
Why paying in advance creates an asset, not an expense, until the period it relates to arrives.
August 2026Provisions for credit notes and doubtful debts: codes 1105 and 1106
The two contra-asset codes that trim Debtors down to a realistic, collectable figure.
August 2026Current, deposit and building society accounts: codes 1200, 1210 and 1220
Why a business might hold cash across three different bank codes.
August 2026Petty cash, cash register and card payments: codes 1230, 1235, 1240 and 1250
Physical till cash and card receipts that haven't cleared yet, each with its own holding code.
August 2026Creditors, sundry and other: codes 2100, 2101 and 2102
The mirror image of Debtors — three codes for money a business owes its suppliers.
August 2026Accruals and manual adjustments: codes 2109 and 2204
Costs not yet invoiced, and manual corrections to the VAT return figures.
August 2026Corporation Tax explained: code 2110
How the year's tax charge gets recognised as a liability before it's actually paid.
August 2026Union OSS, Non-Union OSS and IOSS tax control: codes 2205, 2206 and 2207
Three codes for EU cross-border VAT schemes, kept separate from ordinary UK VAT.
August 2026P.A.Y.E., National Insurance, net wages and pension fund: codes 2210, 2211, 2220 and 2230
Money withheld from payroll and held until it's paid over to HMRC or the pension provider.
August 2026Loans, hire purchase and mortgages: codes 2300, 2310 and 2330
Borrowing repaid over more than a year, split by the type of finance.
August 2026Directors' loan accounts explained: codes 2301 and 2302
Money owed between a company and its directors personally, which can flip either way.
August 2026Ordinary and preference shares explained: codes 3000 and 3010
How the two share classes differ, and why Sage keeps them apart.
August 2026Reserves and undistributed reserves: codes 3100 and 3101
Profit set aside for a purpose, versus profit simply retained in the business.
August 2026Profit and Loss Account explained: code 3200
The balance sheet figure that carries forward every year's retained profit or loss.
August 2026Sales Types A-E explained: codes 4000, 4001, 4002, 4100 and 4101
Sage's generic starter sales codes, and why most businesses rename them.
August 2026Discounts Allowed explained: code 4009
The sales code that runs against the grain, carrying a debit balance instead of credit.
August 2026Management Charges Receivable and Flat Rate Benefit/Cost: codes 4010 and 4099
Inter-company recharges, and the VAT Flat Rate Scheme adjustment.
August 2026Sales of Assets and Credit Charges: codes 4200 and 4400
Proceeds from selling old equipment, and late payment charges levied on customers.
August 2026Miscellaneous income codes: 4900-4905 explained
Six codes for income that falls outside a business's core trading activity.
August 2026Materials, imports, misc purchases and packaging: codes 5000, 5001, 5002 and 5003
The raw inputs a business buys to make what it sells, split by source and type.
August 2026Discounts Taken explained: code 5009
The mirror image of Discounts Allowed — a credit balance recording supplier discounts received.
August 2026Carriage, import duty and transport insurance: codes 5100, 5101 and 5102
The real cost of getting purchased goods to the business, beyond the invoice price.
August 2026Opening and closing stock explained: codes 5200 and 5201
How these two codes turn raw purchases into a true cost of sales figure.
August 2026Productive labour, cost of sales labour and sub-contractors: codes 6000, 6001 and 6002
People costs directly tied to producing sales, sitting alongside materials in cost of sales.
August 2026Sales commissions, promotions, advertising, gifts and P.R.: codes 6100-6203
The cost of actively winning sales, treated as a direct expense rather than a general overhead.
August 2026Miscellaneous Expenses explained: code 6900
The Direct Expenses catch-all code, and why it should stay small.
August 2026Gross wages, staff salaries and regular/casual wages: codes 7000, 7003, 7004 and 7005
Splitting non-director payroll by how a business's workforce is structured.
August 2026Directors' salaries, remuneration and employers NI: codes 7001, 7002 and 7012
Why director pay is kept separate from ordinary staff pay throughout the chart of accounts.
August 2026Employers N.I. and Employers Pensions explained: codes 7006 and 7007
The true, fully-loaded cost of employing someone beyond their gross pay.
August 2026Recruitment Expenses and Adjustments explained: codes 7008 and 7009
The cost of hiring, and correcting payroll errors from a prior period.
August 2026SSP and SMP Reclaimed explained: codes 7010 and 7011
Statutory pay reclaimed from HMRC, reducing the true cost of staff absence.
August 2026Rent, water rates, general rates and premises insurance: codes 7100, 7102, 7103 and 7104
The standing cost of occupying business premises.
August 2026Electricity, gas, oil and other heating costs: codes 7200, 7201, 7202 and 7203
Energy costs split by fuel type, useful since prices move independently.
August 2026Vehicle fuel, repairs, licences and insurance: codes 7300, 7301, 7302 and 7303
The core running costs of any business vehicle.
August 2026Misc motor expenses, congestion charges, mileage and scale charges: codes 7304, 7305, 7306 and 7350
Odder motoring costs, employee mileage claims, and the VAT fuel scale charge.
August 2026Travelling, vehicle hire and hotels: codes 7400, 7401 and 7402
The cost of business trips away from base.
August 2026UK and overseas entertainment, overseas travelling and subsistence: codes 7403-7406
Client entertainment, overseas trips, and why entertainment VAT usually can't be reclaimed.
August 2026Printing, postage, stationery and books: codes 7500, 7501, 7502 and 7503
The small, steady costs of running a physical office.
August 2026Telephone, internet, computers and mobile charges: codes 7550, 7551, 7552 and 7553
The connectivity and IT running costs of a modern business.
August 2026Legal, audit and accountancy fees: codes 7600, 7601 and 7602
The core professional services most limited companies need at least once a year.
August 2026Consultancy, professional fees, management charges and software subscriptions: codes 7603-7606
Discretionary outside expertise and recurring software costs.
August 2026Equipment hire, machine maintenance and leasing: codes 7700, 7701, 7702 and 7703
Equipment used without owning it outright, and keeping it maintained.
August 2026Repairs and renewals, cleaning, laundry and premises expenses: codes 7800, 7801, 7802 and 7803
Keeping premises usable day to day, beyond rent, rates and utilities.
August 2026Bank interest paid, bank charges and currency charges: codes 7900, 7901 and 7902
The cost of using everyday banking services.
August 2026Loan interest, H.P. interest, credit charges and factoring charges: codes 7903, 7904, 7905 and 7908
The cost of borrowing and financing beyond the everyday bank account.
August 2026Exchange Rate Variance and Other Interest Charges explained: codes 7906 and 7907
Currency movement gains and losses, and a catch-all for miscellaneous interest.
August 2026Depreciation charges explained: codes 8000, 8001, 8002, 8003 and 8004
The annual expense side of asset depreciation, linked back to Fixed Assets.
August 2026Bad Debt Write Off and Provision explained: codes 8100 and 8102
Debts confirmed as uncollectable, and the year-end estimate for future losses.
August 2026Donations, subscriptions and clothing costs explained: codes 8200, 8201 and 8202
Charitable giving, professional memberships, and workwear.
August 2026Training costs, insurance and refreshments explained: codes 8203, 8204 and 8205
Investing in staff development, general insurance, and workplace refreshments.
August 2026Cash Register Discrepancies and Sundry Expenses explained: codes 8206 and 8250
Till differences worth watching, and a final general catch-all code.
August 2026Taxation, Suspense and Mispostings accounts explained: codes 9001, 9998 and 9999
The final three codes — the tax charge, and two temporary error-correction holding accounts.