eAccounts Global - Newsletter 143

14th July 2006 - Newsletter 144

Please read and distribute amongst your staff.

This Newsletter covers a huge revamp of the General Ledger internal checking systems.

We have been noting many errors in users GL’s particularly in their GST Reports. Most of these errors show up because of incorrect GST Rules applied to GL Accounts or incorrect processing of GL Adjustments (formerly called Sundry Journals)

Please read very carefully at the end of this topic on how to do adjustments to your general ledger in particular the fact that you should never be posting transactions (Journals) to the GST accounts.

GST Report Upgrade

The GST Report onscreen now shows the calculated GST% for both Payments and For Receipts onscreen. The % shows in Red if the system thinks the value on the GST component of a batch is incorrect for the return.

This is now highlighted many errors in the way users are processing GL Adjustments.

General Ledger Integrity Check Facility

This is a new facility that is available under GL Utilities and is a quick test to check if your GL is in balance, it also runs automatically at midnight and checks both this Financial years data and last years Financial data.

This process is very quick, you will know if there is a problem because you will get a large Red error on your main GL Menu screen when there is a problem.

This feature has successfully picked up several (minor) errors in users GL’s both in this years data and the previous years.

GST Rule Checking

Every time you go to your GL Menu, eAccounts internally checks the validity of most of the GL Accounts and checks the GST Rules Associated with them.

Huge numbers of incorrect GST Rules have been detected. These errors have not stopped your P&L or Balance sheets working but have caused your GST Report not to be accurate.

The staff at eAccounts have tried to fix up most of these on your behalf.

Integration Rules

Every time you go to your GL Menu, eAccounts internally checks the validity of most of the GL Accounts associated with Subsystems. In particular it checks that each eAccounts customer has the correct setup for all the Debtor Receipting adjustment options.

New Help Topic

There is a new Help Topic created called “Doing General Ledger Adjustments” this help topic displays when doing GL Adjustments or under help try using the Keyword=ADJUSTMENTS. Or read on below.

Doing General Ledger Adjustments

It is very important that Sundry Transactions being loaded into the GL are done correctly. Failure to follow some simple rules will cause errors in the following sections :

GST Return

Creditors Subsystem Balance

Debtors Subsystem Balance

And the Bank Reconciliation

The following GL Accounts in particular should never have Sundry GL entries posted to them.
Never post entries to the Sales Accounts

Never post entries to the Bank Accounts

Never post entries to the Creditors Or Debtors Accounts

Never Post To The GST Payments Or Receipts Accounts – This is the biggest error most users are making.

And If you are running the Perpetual Inventory System

Never Post To Stock Accounts

Never Post To Stock Received But No PSlip Accounts

Never Post To Cost Of Sales Accounts

The most common faults that you will need to correct thru Sundry Batches are to do with transactions mis-posted thru Bank Reconciliations. These must be corrected by reversing the original entry and entering the correct entry.

Under no circumstances must we make transactions to the GST Receipts or Payments GL accounts, if you do you will find you GST Report will wrong.

Example – Simple error of posting an amount to the wrong Expense.
If we posted a payment to Advertising and it should have been Stationary we should process :
Credit Payment To Advertising for the total including GST
Debit Payment To Stationary for the total including GST

Note we do not process Journals to the GST accounts.

Example – Correcting an entry where one of the transactions involved GST.
In 99% of the cases the above example solves the issue because the PAYMENT type will only calculate GST on GL Accounts that have a GST rule of “Taxable Expense”

Alternatively the following is valid.

Credit Journal To Bank Charges for the total (no GST involved)
Debit Payment To Stationary for the total including GST

Example – Correcting an entry where an entry was posted as Via Creditors when it was a Sundry payment on the bank statement.
This is a rare case we must break the above rule and process a transaction to the bank accounts.

Credit Journal To Bank Account for the total (Including GST)
Debit Payment To Stationary for the total including GST

Example – Correcting an entry where an entry was posted as Via Debtors when it was a Sundry Receipt on the bank statement.
This is a rare case we must break the above rule and process a transaction to the bank accounts.

Debit Receipt To Rent Rebate for the total including GST
Credit Journal To Bank Account for the total (Including GST)

After hours (emergencies only) Ph Neil on 021 921188 or email neil@eaccounts.co.nz

The Team - Neil, Mark and Mike
(and our consultants Lee, Peter)