As part of your setup, MoneyWorks will have created a tax table for you based on the VAT, GST or Sales Tax rates in your location. It is important that you check this—we do not supply tax rates for every location, and the rates in your location may have changed since your version of MoneyWorks was created.
To check your tax rates:
- Display the Tax table by choosing Tax Rates from the Show menu
- Double click a rate to modify it
For more information on tax tables, see Tax Codes
- Click the OK button to save any changes made and close the Tax Rate window
Entering Outstanding Information
Unless your business is just starting, there will be transactions entered prior to the Start Date which do not get completed until after the Close-off Date. For example you may have received an invoice and not paid it until the end of the following month.
These incomplete transactions need to be handled specially. We are not interested in the detail of the transaction because it occurred prior to the Start Date. However we do need to record enough information so that details of its completion can be recorded (e.g. when you finally pay the unpaid invoice).
A few points to note on entering incomplete transactions:
- They will all be dated before your Start Date and will appear in your Setup Period
- MoneyWorks is not interested in the finer details of what the transaction was for, but only that it is not yet completed. Hence these transactions are not coded to income or expense accounts (this has presumably already been done outside MoneyWorks). We code all incomplete transactions to the Setup account.
- These transactions will all affect your balance sheet in some way
- The transactions should have the same GST, VAT or Sales Tax as the original
GST, VAT, Sales Tax and the Setup Account
It is important that taxes on the opening transactions are correctly handled. Normally you will have accounted for any such tax in your previous system, so you want to be careful not to double count it. However if someone doesn’t pay one of the outstanding invoices, you will want to reclaim the tax.
Also, where you are reporting for GST or VAT on a payments/cash basis, MoneyWorks will look at the original invoice to determine the GST/VAT component of the payment. Hence it is important that the GST/VAT component of these is correctly stated.
For these reasons the Setup accounts should be always be setup to reflect the rate on the original transactions, and thus will have a “TAX” rate in North America, a “G” tax rate GST countries, and a “V” rate in VAT countries. You should check in the Accounts list —see Modifying an Account that the Setup account(s) match your local tax requirements.
The following sections should be used as a guide to entering your opening balances. Bear in mind that situations do vary, and this general “recipe” may not work for you. If in doubt ask your accountant.