Category Archives: QuickBooks

What do you need to know when switching from Reckon Accounts to Intuit QuickBooks Desktop?

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.

GST item

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.

GST Code

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.

General Journal

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.

General Journal
You cannot tag a GST code to an expense account in a General Journal

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.

GST Report
Require to File Tax Return

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.

Book a demo to find out more if you are considering switching from Reckon Accounts to Intuit QuickBooks (either QuickBooks Desktop or QuickBooks Online).

Go Digital from home does work and stay productive.

Coronavirus pandemic has sent a shockwave to small businesses. It changes how we used to work. With web meeting and work from home as part of the equation, desk maybe shared instead of a personalised cubicle with family pictures and certificates hanging around, or full of Post-it notes sticking on the monitor. Cut down travelling. Executives don’t need to waste time at the airport waiting for the transit flight to bring them from one place to another; it just a few clicks of the button away will move from one meeting to another…within second. Virtually.

Things have changed.

The business owner may take this opportunity to downsize, move to a smaller office unit since you do not need to showcase your financial muscle by staying at a luxury office unit in the business district. It may help to prevent excessive rent eating into your financial resources.

Where is my document?

Working from home is challenging. Distraction, proper office equipment, locating documents are the issues we had when working from home.

Most small businesses do not have a digital filing system in place, and the majority are still relying on hard copy filing. The sudden change in the way we work has caught most of the small businesses off guard.

You need the supporting documents to verify when there is a discrepancy in the business accounts. You get frustrated when information is not digitally available. You are supposed to work from home, reduce movement to prevent the spread of COVID-19 virus, but have to get back to the office to complete the task.

Go digital.

MoneyWorks Now and QBO (QuickBooks Online) is cloud-based small business accounting software. Both are low cost and do not need sophisticated computer hardware to power it.

The built-in document feature allows the accountant to attach the related PDF document to the transaction. For example, attaching a supplier quotation to the purchase order, a bill to the purchase invoice, or a bank transfer note to the payment transaction, etc.

You can search the transaction by name, type, references, or drill down from the report. There are lots of advantages to having a document attached to the business account. Try it!

To attach a document in MoneyWorks:
Click the image icon at the top right-hand corner and select import image. Then, select the PDF document from the File Explorer (Windows) or Finder (macOS), and hit the open button to attach the file.

Attached document in MoneyWorks

To attach a document in QBO (QuickBooks Online):
Click the attachment box on the left bottom of the transaction, and select the PDF document from the pop-up windows.

Attached document in QBO (QuickBooks Online)

Simplify the workflow, keep it lean, and change the way you work to survive the coronavirus pandemic.

Stay safe and healthy.

QuickBooks Online (QBO) – offset a deposit received

A deposit received is a payment for goods and services which yet to deliver. It’s liabilities. The balances are cumulative presents in the Balance Sheet. It has to offset against the invoice when goods and services have fulfilled at a later stage.

All the balances in the Balance Sheet have to transfer over when the accounting system changed. And that includes the deposit received from various customers.

Let’s assume that you have decided to move your business accounts to the cloud and adopted QuickBooks Online (QBO) accounting system.

You can use the general journal to transfer the balances from the Balance Sheet to the QuickBooks Online. Set the date of the journal as the crossover date, and then debit the opening balance equity and credit the deposit received account when transferring the deposits over to the new system.

Receive payment in QuickBooks Online (QBO)

Issue an invoice when goods and services have fulfilled on the following financial year. Then, use a journal to transfer the deposit, which paid by the customer in the previous year, to the receivable account. It reduces the amount owed by the debtor when the journal credits the accounts receivable.

Offset the journal with the outstanding invoice when payment received.

QuickBooks accounting system is easy to use and is suitable for small businesses. Sign up a demo to find out more.