Category Archives: GST

Specify the currency conversion rate (Exchange Rate)

Software: MoneyWorks accounting software

For purchases made from a GST register trader in foreign currencies, the supplier has to reflect the GST payable on the invoice in Singapore dollars with an approved exchange rate. You, the buyer, should claim input tax based on Singapore dollar amounts shown on the tax invoice instead of conversion based on your in-house exchange rate.

For example, your in-house exchange rate is 1SGD:0.7400USD, but received a Bill from a supplier at a rate of 1SGD:0.7431USD. Then, you should record the Bill (Purchase Invoice) with an exchange rate of 1SGD:0.7431USD instead of using the system rate 1SGD:0.7400USD.

Assuming the GST amount of a Purchase Invoice is US$700. It will be $$945.95 (700/0.7400) if recorded based on system exchange rare of 1SGD:0.7400USD and S$942.00 if the exchange rate has changed to 1SGD:0.7431USD.

As you can see from the above illustration when the exchange rate changed, the GST amount in Singapore dollar changed.

Click the exchange rate button on top of the purchase invoice to change the exchange rate of a transaction in MoneyWorks accounting software.

Change exchange rate

Then, uncheck the ‘Use system rate at posting time’ checkbox from the Currency Rate wizard and amend the exchange rate for the transaction.

You should check with your accountant or IRAS if you have doubt on GST transactions.

 

Specify the currency conversion rate

Software: MoneyWorks accounting software

 

GST register trader who supplies goods in foreign currency instead of Singapore dollar has to indicate the Singapore dollar equivalent GST amount on the invoice. The buyer who received the Bill has to record it based on the exchange rate stated in the Bill instead of the in-house exchange rate set in the accounting systems.

Assuming your in-house exchange rate is 1SGD:0.7400USD but received a bill of USD10,000 with a GST of USD700 at an exchange rate of 1SGD:0.7431USD. In this case, you should record the Purchase Invoice (Bill) into MoneyWorks at an exchange of 1SGD:0.7431USD instead of 1SGD:0.7400USD. The GST amount recorded should be SGD942 instead of SGD945.95.

Below are the double entry of a Purchase Invoice at a different exchange rate.

Exchange Rate is 1SGD:0.7400USD

Debit Expense 10,000
Debit Expense 3,513.51
Debit GST Paid (Input) 945.95

Credit USD Accounts Payable 10,700
Credit USD Accounts Payable Delta 3,759.46

Exchange Rate is 1SGD:0.7431USD

Debit Expense 10,000
Debit Expense 3,457.14
Debit GST Paid (Input) 942.00

Credit USD Accounts Payable 10,700
Credit USD Accounts Payable Delta 3,759.46

Change exchange rate

By default, a foreign currency transaction picks up the system exchange rate; to change it, click the ‘Exchange Rate’ button on top of the transaction window, follow by unchecked the ‘Use system rate at posting time’ checkbox in the Currency Rate wizard, and change the exchange rate accordingly. This change allows the system to use the exchange rate you set in the transaction instead of using the system rate at the posting time.

MoneyWorks will adjust the outstanding Purchase Invoice, the foreign currency accounts payable account, to the unrealised exchange gain/loss account when there is a change in month-end exchange rate.

You should discuss the GST matter with your accountant or find out more from IRAS.

 

 

Show Tax column in invoice transaction

Software: MoneyWorks #accounting software
By default, MoneyWorks does not show the tax column in transactions windows such as Sales Invoice and Purchase Invoice. When recording a transaction, you just need to select the tax code and let MoneyWorks do the tax calculation automatically.

However, due to rounding differences, the GST amount on the bill you received may be different from your entry. To adjust the GST amount, you need to turn on the “Show Tax Column” from the Document Preferences, then amend the tax amount in the transaction according to the bill received.

show-tax-column

You will get a warning message that the GST report contains anomalous transactions if there is any incorrect GST amount for the tax code.