Although you can create multiple receivable accounts in QuickBooks Online Singapore version, the receivable field is not available in the sales invoice form. The intention ‘could be’ trying to simplify the process by having one receivable for each currency to prevent a mistake in the classification of account. For those who are using multiple receivable accounts in QuickBooks Desktop may take note of the differences.
Some user may create the subsidiary as a customer or supplier in QuickBooks. You can print a standard Profit & Loss or Balance Sheet report and set the column to display either by customer or supplier. You do not require any additional setting but have to separate the customer and supplier into two difference report. It’s workable but maybe a little tedious to some accountants.
How about using the class feature?
QuickBooks Online manages the class slightly different from the Desktop version. The class selection is only available for the detail line of the transaction, but not for the transaction header account such as a bank, receivable or payable. For example, you can select a class for the expense account but not the payable when entering a bill. You can have a Profit & Loss with the column by the class report, but not an accurate Balance Sheet by Class.
Consider location instead.
QuickBooks introduces the location feature in the Online version to categorise the data from multiple warehouses, branches, or inter-companies. The usage is similar to the class feature, but it affects both header and detail line accounts when a location has tagged. You can prepare column by location for both Profit & Loss and Balance Sheet, which helps the accountant prepare contra during consolidation.
Try location feature if you haven’t done so. Let us know how you managing inter-company billing in QuickBooks Online 🙂
An account receivable account adds to the account list when you create a company file in MoneyWorks. The amount owed by the customer, for goods and services sold on credit, get updated in accounts receivable account. Renamed the accounts receivable to trade debtors (or trade receivable) if you prefer to separate trade from non-trade. Then, add other debtors or inter-company receivable to the list for tracking non-trade debtors or subsidiaries.
Each debtor (the name) links to a receivable account. Whether it is a trade, non-trade, or subsidiary, the receivable account field of the name has to tag to an account receivable account to use it in invoices. The ageing process kicks in when an invoice posted.
Since a name has to tag to a receivable account, invoices to the subsidiary may have to do it outside the system if the inter-company receivable is a current asset type instead of an account receivable. The function is different, although accounts receivable is part of the current assets category. It is workable, but maintain the outstanding in foreign currency may be time-consuming.
You can set the bank, accounts receivable, and accounts payable with a foreign currency. These accounts get revaluated once new exchange rate entered. If inter-company receivable has set up as a current asset type; then, the exchange gains or losses have to record via a general journal if the outstanding is in foreign currency. It could be tedious when there are lots of entries.
Invoice subsidiary for expenses paid on behalf
Assume you have paid $10,000 to XYZ supplier, which inclusive of $2,000 worth of services on behalf of your subsidiary ABC.
As mentioned earlier, you can invoice the subsidiary when the name has tagged to a receivable account. Create an invoice to the ABC subsidiary from MoneyWorks for $2,000 and add the expense which you use for paying XYZ supplier at the detail line of the invoice. The invoice posted debit the inter-company receivable and credit expense account, which will then reduce the expense from the original $10,000 to $8,000.
The above example is for illustration, the account used may vary.
Both methods have advantages and shortfall. Consult your accountant and try out on a sample file with your existing data and compare the result before adopting either.
Note: Some accountant may name it as Intercompany or Interco instead of Inter-company.
Reckon Accounts formerly known as Reckon QuickBooks or QuickBooks Asia; it’s a desktop accounting software with thousands of users in Singapore and Malaysia. There are some differences in GST between Reckon and Intuit QuickBooks; the user should take note of when switching over to Intuit QuickBooks Desktop. These include setting up of GST, recording a general journal with GST, and GST reporting.
Setting up of GST in Intuit QuickBooks Desktop
Set up the GST account after you have turned on the GST feature from the Preferences. The choice is yours, whether to have:
a single GST account for both input and output GST,
a current asset account for the input GST and current liability for output GST, or
a GST control account with subaccounts for both input and output GST, which all three GST accounts are current liabilities.
I prefer the last method, to have a control account and subaccounts for input and output, it allows me to glance the net GST payable or receivable from the Balance Sheet instead of relying on the GST report.
Next, create a vendor and set it as a sales tax agency. Name the vendor as Comptroller of GST and link GST output account to the track tax on sales field, and GST input to the track tax on purchases.
Create the tax item from the items list. Every tax item consists of a tax rate, such as 0% or 7%. Then, link the Comptroller of GST to the Tax Agency field and set the Sales Tax Return field to either Tax on Purchase or Tax on Sales.
Example, create two tax items for the standard-rated GST, one for the output and another for the input:
7P – for standard-rated 7% GST Input
7S – for standard-rated 7% GST Output
The GST item code, 7P and 7S, is for illustration; you can create your preferred code such SR7 for standard-rated 7% GST Output and TX7 for standard-rated 7% GST Input.
The sales invoice, sales receipt, write cheque transaction uses tax code on each detail line (either item or GL account). Each tax code linked to either one or two tax item depending on the nature of the GST code. For example, standard-rated 7% GST uses in both sales and purchase; then, linked 7P (which we have created earlier) to the tax item for purchase and the 7S to the tax item for sales field. On the other hand, if you only use Deem Supplies tax code in rental income (GST output); then, you only need to set the Deem Supplies tax item to the tax item on sales field.
How does it work?
When you enter a bill with a standard-rated GST code:
It links to the tax item for purchases set in the tax code.
The tax item, which has a tax agency tagged, update the tax on purchases section of the GST report.
Then, at the same time, the tax amount updates the GST Input account, which has set up in the tax agency profile, of the Balance Sheet.
A general journal is for adjusting the business accounts, such as recording of depreciation or accruals into the system. GST item can only tag with the GST Input or GST Output account in General Journal, but not with other P&L or Balance Sheet accounts.
Consider using Enter Bill or Write Cheque transaction instead of a General Journal if you are trying to record an expense with GST.
File Tax Return
The GST report consists of sales, purchases, tax on sales (output), and tax on purchases (input). Export to Microsoft Excel feature is available in QuickBooks Desktop for you to filter, sort, and analyse before filing GST Form 5 via IRAS website.
Intuit QuickBooks Desktop requires to process GST (by clicking the File Tax Return button at the top of the GST report). The process transfers the GST amount in the Input and output account to the accounts receivable or payable.
You can view the GST payable from the AP ageing report or receivable from the AR ageing report after you have done the File Tax Return process. Then, do a Pay Bill when GST is due for payment, or Receive Payment transaction when you have received the refund from the Comptroller of GST.