The account type of each account has to be correctly specified when you create it. QuickBooks uses the account type to form financial report; below is a sample structure of a Profit & Loss report.
Less: Cost of Goods Sold
Net Ordinary Income
Add: Other Income
Less: Other Expenses
The presentation of the report gets affected when a wrong account type used. For example, Transport allowance will group with Cost of Sales if you created it as a Cost of Goods Sold account type instead of Expenses; hence, affecting the Gross Profit. QuickBooks does allow the user to edit the wrongly created account type such as from Cost of Goods Sold to an Expenses account type but not from a Bank type to an Expense. You may have to pass journals to rectify the transactions when a mistake made on a non-editable account.
You get a “You cannot change the type of a subaccount. It must be the same type as its parent account” warning message if you try to amend an account type of a subaccount. For example, Transport Allowance has accidentally created under Purchases (which is a cost of goods sold account), to change the type to an Expenses you need to remove Transport Allowance as a subaccount of Purchases first, then change the account type. You should not change the account type if it affects the previous year or prior month’s financial report which you have already filed; instead, you may consider reclassifying the account with a journal.
Traceability and accountability should be the priority before consider making any amendment to the account.
A bank reconciliation is a process of reconciling the Cash Book account (GL) with the Bank Statement. It is a process of picking the discrepancy between the two, such as omission error, typo error, duplicated transactions, etc..
Occasionally you may make a mistake when reconciling and require to revert the processed reconciliation. To do it, you have to click the ‘Load Old’ button from the Reconciliation window of the MoneyWorks accounting system and select the month of reconciled data to clear. Assuming you have reconciled five months from Jan to May, it will undo the reconcile from March to May if you selected March from the reconciled list. Once the reconciled detail loaded, click the gear icon and select ‘Clear all reconciliations from this month’ option. Proceed to reconciliation again once wrongly reconciled data has cleared.
Malaysia new government has decided to scrap GST (Goods and Services Tax) from June 2018; the standard rated GST is going to reduce from the 6% to 0%. What are those setting which you need to change in MoneyWorks accounting system?
Unlike some other software which requires you to create a new GST code to cater for the rate change, MoneyWorks allows you to set a new GST rate at a specified changeover date within the tax code profile. First, change the default tax rate (Rate 2) of tax code such as G GST Code (for SR and TX GST code) from 6% to 0%, then enter the old rate (6%) in Rate 1 field and set the changeover date to 1 June 2018.
Once the tax rate changed, any transaction which uses the amended GST Code will be 0% automatically.
Go through the list of GST code from the Tax Rate table (under the Show menu) and amend those codes which require changes. You may have to consult your accountant or tax department as the changeover could be complicated especially regards to those bad debts recovered or capital goods acquisition/disposal transactions.
You are still required to process the finalisation of GST at the end of each GST cycle although the rate has changed from 6% to 0% as the GST system is still in place and MoneyWorks is still actively tracking the GST of each transaction.
The newer version of MoneyWorks is v8, contact us if you require upgrading your existing version.