Category Archives: Reckon Accounts

Mail merge with accounting software

Create Statement of Account from the accounting software is a Mail Merge process. During mail merging, the fixed field such as debtor, address, the amount due, etc. merges into the Statement template. Besides Statement of Account, documents such as reminders and letters also can usually create from accounting software.

Statement of account

MoneyWorks accounting software does have it own form designer to create Statement and letters. You can use the form designer to create a simple relocation of office notice or a letter of demand; it may not be fanciful but good enough to get the message across.

QuickBooks Desktop, on the other hand, integrates with Microsoft Word to create documents. Check the system requirement to ensure the software you have is compatible with each other. You can check with Intuit, Reckon if you are using Reckon Accounts (formerly known as Reckon QuickBooks), or the QuickBooks reseller whom you have bought the software.

Accounting software is not a marketing tool; consider using a CRM (Customer Relationship Management) software, e-Marketing application, or a Contact Manager software like ACT!, etc. to create marketing mailers such as promotional mailer or ‘keep in touch’ kind of letters to prospects and customers.

 

 

How to record a Hire Purchase transaction in QuickBooks accounting software?

Software: QuickBooks #accounting software

Hire Purchase (HP) is a financial product which allows businesses to purchase an asset with monthly instalment. Although the payment of an asset with hire purchase is higher comparing with full payment upon purchase, it eases the cash flow.

Assuming a copier cost $15,000 before 7% GST ($16,050 inclusive of GST) and you decided to get the Copier with a Hire Purchase plan. If the monthly instalment is $320 and based on five years hire purchase plan, the amount paid is $19,200 ($320 * 12 months * 5 years) inclusive of $3,150 hire purchase interest. Although it cost more to buy an asset with hire purchase, it helps small businesses acquire an asset with a low monthly repayment.

Let’s say the first bill received from the finance company is:

Cost of Copier: $15,000.00
Add 7% GST: $1,050.00
Total financed amount: $16,050.00

You record the bill into QuickBooks with the accounts under the Expense tab as:

Row1: Cost of Office Equipment (FA): 15,000 (with 7% GST Code)
Row2: Interest in Suspense (LTL): 3,150
Row3:: Hire Purchase (LTL): -19,200

quickbooks-accounting-software-hire-purchase

You create both the Interest in Suspense and Hire Purchase account as a Long-Term Liability since the payment term is more than a year. The double entry of the Enter Bill transaction:

Debit Cost of Office Equipment 15,000
Debit GST Input: 1,050
Debit Interest in Suspense: 3,150

Credit Hire Purchase 19,200

Use a General Journal transaction in QuickBooks to reclassify the current year Interest in Suspense and Hire Purchase repayment amount from the Long-Terms Liability to the Current Liability. Assuming the current year interest is $630 (3,150/5 years), the journal:

Debit Hire Purchase (LTL): 3,840 (19,200/5 years)

Credit Interest In Suspense (LTL): 630
Credit Hire Purchase – Current (CA): 3,840

Debit Interest in Suspense – Current (CA): 630

Subsequently, use Enter Bill (or Write Cheque if no bill received) transaction in QuickBooks to record the monthly repayment bill from the finance company. If you have the monthly repayment schedule, which shows the breakdown of the principal repayment and the interest charged, then record the bill as:

Row1: Hire Purchase – Current
Row2: Hire Purchase Interest
Row3: Less Interest in Suspense – Current

For example, if the monthly interest is 52.50, the transaction will be:

Row1: Hire Purchase – Current: 320.00 (debit)
Row2: Hire Purchase Interest: 52.50 (debit)
Row3: Interest in Suspense – Current: -52.50 (credit)

If you only received a yearly statement from the finance company showing the outstanding hire purchase principal amount instead of a monthly repayment schedule, then pass a journal during year-end closing to debit the Hire Purchase Interest and credit Interest in Suspense – Current account for the interest paid for the year. In this case, the monthly repayment bill shows only the Hire Purchase – Current account of 320.00. The double entry of this bill debits the Hire Purchase – Current account and credit Accounts Payable (or Bank account if Write Cheque is used instead of the Enter Bill transaction).

You should consult your accountant if you have doubt in the accounting entries or classification of accounts.

Do join our demo (for Singapore) to have an overview of the QuickBooks accounting software.

 

Rename the field labels in QuickBooks template

Software: QuickBooks Desktop accounting software

Due to limited fields available in the template design, you may rename the field label to fine tune the QuickBooks accounting software towards your requirement.

For example, if you are not using the FOB field but require a Permit Number field in your Sales Invoice, you may rename the field label of “FOB” to “Permit No.”.

rename-label

Although both the data entry and print out is using the new field label (Permit No.), the field name remains as “FOB”. In the Find function or insert the data field into the report you still use the original name (FOB).

quickbooks-report