Category Archives: Accounting

Amending GST amount on Purchase Invoice

Software: MoneyWorks accounting software

There are two methods of computing the GST on Tax Invoice when the invoice contains more than one item with the standard rated supplies. The line item method, which commonly used in accounting software; this method computes the GST on each line item and then sums up the GST amount. The second is a subtotal method, which calculates GST based on the total payable.

Document Preferences

Assuming you sold 9 pieces of product A at $13.98 each and 7 pieces of product B at $17.38 each.

Method one (the line item method):

9 x Product A @$13.98 = $125.82 x 7% GST = $8.80
7 x Product B @$17.38 = $121.66 x 7% GST = $8.51
Total GST = $17.31

Method two (Subtotal method):

9 x Product A @$13.98 = $125.82
7 x Product B @$17.38 = $121.66
Subtotal: $247.48
7% GST = $247.48 x 7% = $17.32

Amend GST

Both methods of computing the total GST are acceptable so long as you apply the chosen method consistently.

IRAS Calculating GST on invoice

Due to a different method used or rounding between two systems, the GST amount on supplier invoice may differ from your entry. You need to set to show tax column from the MoneyWorks Document Preferences to allow amending the GST amount on Purchase Invoice transaction. A warning message may prompt when printing the GST report, and the report highlights those transactions in question.

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Undo Bank Reconciliation

Software: MoneyWorks accounting software

Bank reconciliation is a periodic process to match the bank statement against the information you have recorded in the accounting system. Besides being a fraud control tool, it picks up error such as omitted entry, an incorrect amount recorded, duplicated information has recorded, has recorded transaction into a wrong financial period, etc.

Assuming you invoiced Customer A and Customer B with the same amount $321. Then, you accidentally knock off the payment received from Customer B against the Customer A’s outstanding invoice. You can use the cancel transaction function to reverse the entry and enter a receipt from Customer B to correct it.

Screenshot 2020-02-12 at 4.14.34 PM

Alternatively, you can also use the ‘undo’ bank reconcile method if there are many mistakes made in the reconciliation. From the Bank Reconcile wizard, click the ‘load old’ button and select the previous bank reconciliation. Then, click the gear icon at the bottom of the wizard and select the ‘clear all reconciliation from this one…’ option. Assuming you have reconciled from January to June, and discover a mistake in March. You have to undo the bank reconciliation one month at a time from June to March.

MoneyWorks is a small business accounting system which can install locally or hosted it in a Cloud. Contact us to find out more about using MoneyWorks for your business.

 

MoneyWorks update 8.1.9

Cognito has released the update 8.1.9 for MoneyWorks accounting software. This update enhanced the performance and bug fixes for the software.

Now, the user allows importing one payment for more than 255 invoices, which this was previously limited.

The full change history is available at Cognito website.

Book a free demo here if you consider switching over to MoneyWorks accounting system.