Should items and accounts lists have the same items?

I'm new to Reckon but have a basic understanding of accounting. I have taken on a new role and Reckon was set up by my predecessor.

Shouldn't the items list and chart of accounts list be identical so payments received for goods delivered can be assigned to the the sub-categories that have been set up in the chart of accounts? Currently, the items list has the “mother category” only, with no sub-categories, so when I try to assign a payment received, I can only assign this to the “mother category”.
Currently, there are a number of “Undeposited Funds” which I believe is due to not being able to assign the payments to the proper category in the charts of accounts.

If they should be the same, is there an easy way to auto-populate the items list with the chart of accounts sub-categories or does this have to be done manually?

Any assistance would be highly appreciated because I am totally lost!

Answers

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited February 2023

    Hi @pngda

    No! This is a common misconception which does nothing other than clutter your lists, your reports & ultimately your company file, eventually affecting the performance & stability of it!

    Reckon Accounts contains an extensive range of reports (including on Items). You can also search for anything & turn that into a customised report!

    If you think about manual bookkeeping, your Chart of Accounts (CoA) represents the columns in your ledger book.

    Accounts can't be added directly on Sales forms (eg Sales Orders, Quotes, Sales Receipts, Tax Invoices) nor on Purchase forms (Purchase Orders, Bills, Cheques). Instead, we use Items that are linked to relevant Accounts. HOWEVER the difference is that your Items are UNIQUE, whereas your accounts are GENERIC.

    Think of the scenario of a business that sells beauty products for example. Ideally they would be tracking their stock so every Item would be set up in their Item List. BUT their CoA should summarise this as it is this accounts list that determines your financial reporting detail (eg you don't show every Item a business sells on their Profit & Loss, just sales/income)
    For some, this may be just a single “Sales” account. For others, they may want to break this down a little further - into sub accounts for “Health”, “Beauty” & “Hair” for example.


    NB: Payments are not assigned to Accounts or Items - Instead, they are "allocated" to existing Bills (Accounts Payable) or Tax Invoices (Accounts Receivable) entered.

    Reckon Accounts (along with all the other major accounting programs) rely on the use of Tax Codes. These tax codes indicate the taxable status of a transaction (eg whether it has GST or not) in order to ensure accurate reporting for EOFY & BAS etc. This status is only applicable on sales & purchases/expenses which is why it's essential to use the relevant forms for entry as tax codes are not applicable (& therefore can't be assigned) to deposits/stand-alone payments.

    The Undeposited Funds account represents payments that have been received but not yet deposited (eg Cash/Cheques held in a Deposit Book until you take them to the bank) TIP: I rename this account to “Deposit Book” in the CoA to make this clearer. NOTE: If you receive payment via EFT, the payment entry should be deposited directly to the bank account (as this is what's occurred … a direct deposit) - This is something that can be enabled/disabled in the Preferences.

    Reckon Accounts is extremely powerful & has more features & reporting than any other accounting solution on the market.
    It sounds like you would benefit from some 1-on-1-training to get the most out of it. If that's something you might be interested in, feel free to get in touch with me direct ☺️

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    [email protected]

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • pngda
    pngda Member Posts: 4

    Hi Shaz,

    Thank you so much for your super-quick reply! As you can see, I my basic understanding of accounting is VERY basic!
    I have just two more questions for you, if I may:

    1. The way our system was set up is that we have a main category which is the Item, then in the CoA, there are sub-categories. When I issue an invoice, I can only select the item, but none of the sub-categories. For example, we are an association, so we have different membership levels. When I issue an invoice, I can only select the item “Membership”, but not which level of m'ship as listed in the CoA. This means I have to add the description manually. That doesn't seem right for such a sophisticated program.
    2. Any payments made by our members end up as “Undeposited Funds”. Why is that?

    Once again, Shaz, thank you so much for your assistance. If the above questions require more info than you can provide here, please let me know and I'll contact you directly.

    Best,
    Ange

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited February 2023

    Hi Ange

    It sounds like the system's not been set up very efficiently - I would have separate ITEMS for each Membership level (so you can select the applicable one to autofill on an invoice) but - unless the specific breakdown is relevant on a P&L - these should ALL just be linked to the one “Memberships” Income account in the CoA.


    In Preferences (under the Edit dropdown menu along the top toolbar) UNTICK the checkbox that defaults all payments received to Undeposited Funds - This will then allow you to select either this or another (bank) account when you Receive Payment

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    [email protected]

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • pngda
    pngda Member Posts: 4

    Hi Shaz,

    I've changed the Undeposited Funds box, thanks for that. For the other issue, I will e-mail you directly.

    I, too, believe that the person who set up Reckon didn't do a great job as it looks like there are so many functions available to us that we are not using.

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert

    Absolutely - it's also extremely customisable ☺️

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    [email protected]

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)