adjustments not showing in tax cash mode

  • 1
  • Problem
  • Updated 1 year ago
I am hoping to have better luck of someone understanding my problem here as I have been communicating with support for about a month and still have not solution.  My adjustment notes are not showing up in my GST summary or tax transaction code reports when I am in cash mode, I have changed date range to 1/1/16 - 8/8/17 and not one adjustment is shown.  My tax is cash basis so I can not have it in accrual mode and this seems to be the only time that the adjustments show up.  I know that my BAS is not because the adjustments have gst on them.  Has anyone else had this problem and found a solution. Thanks
Photo of Jodie

Jodie

  • 142 Points 100 badge 2x thumb
  • hopeless

Posted 1 year ago

  • 1
Photo of Linda Putland

Linda Putland, Accredited Partner

  • 5,522 Points 5k badge 2x thumb
Hi Jodie, I believe your adjustment notes will only be included if they have been applied to a tax invoice, AND if that tax invoice has been paid...  and even then, the period it will show in will depend upon the dates of the adjustment note/payments, I think?
Photo of Jodie

Jodie

  • 142 Points 100 badge 2x thumb
Hi Linda,
                I am going to explain a bit more in the hopes that you can help me. Invoice is created on 15 June has $3.18 gst included, adjustment in created and applied to that invoice on 15 June and has $56.75 include which should make gst -$53.57. Account is paid on 10 July so when I create report Toogoolawah Kindergarten Association Inc. For 1 June to 31 July 2017, cash basis the $3.18 gst shows up but no where is the -$56.75 gst from the adjustment note it only shows up if I put my book into accrual in tax section which our kindergarten is not set up as that with ATO.  I tried to find a way to attach both reports but was not able to figure it out.

Thanks

Jodie
Photo of Qwerty

Qwerty

  • 7,886 Points 5k badge 2x thumb
01/09/17

Hi Jodie,

I think i’ve wrapped my head around your scenario enough now to be on the same page with you to understand the problem & the resulting question at hand.

I’ll use a less confusing scenario though to recap it. 

Invoice
Gross $110.00
Net $100.00
Tax $10.00

Customer adjustment note
Gross $110.00
Net $100.00
Tax $10.00

When these transactions have been entered but not linked they are unpaid.
- RA tax detail report (cash basis) doesn’t show these transactions
- R1 tax detail report (cash basis) doesn’t show these transactions

When these two transactions are linked they are paid
- RA tax detail report (cash basis) does show these transactions
- R1 tax detail report (cash basis) doesn’t show these transactions

RA tax reports (cash basis) considers this scenario as a cash event  
R1 tax reports (cash basis) doesn’t consider this scenario a cash event

In your particular case, you have non-matching tax amounts for the invoice & adjustment note resulting in a negative tax balance (I’m going to ignore the receipt in your scenario to keep this simple). The RA tax reports (cash basis) is showing the two transactions & giving the negative tax balance. R1 tax report (cash basis) is not showing the two transactions hence you don’t see the negative tax balance.

RA & R1 are giving different results for the same scenario. So the question at hand is whether an invoice linked to a customer adjustment note (e.g. not a physical cash payment) should be considered a cash event in cash basis accounting?
 
I’ve sent this question through to the Reckon team to review.
(Edited)
Photo of Jodie

Jodie

  • 524 Points 500 badge 2x thumb
Hi Qwerty, "sigh" someone understands me lol..  I hope you have more luck than me as I have been messaging back and forth with R1 team about this since May. Appreciate all of the time you have spent trying to help me.
Photo of Qwerty

Qwerty

  • 7,886 Points 5k badge 2x thumb
Hi Jodie,

I have a few more questions to help in understanding the scenario a little better.

Q1: You mentioned earlier in the thread that this is a Kindergarten. Does government funding you receive relate to the child care rebate?

Q2: If yes to Q1, does the customer adjustment note in R1 represent the clients rebate?

Q3: If yes to Q2, are you entering the rebate as a customer adjustment note in R1 because the invoice form in R1 doesn't allow you to use a negative line?

Q4: If yes to Q3, in RA did you previously handle this using an invoice with both a positive line & a negative line (for the rebate) & therefore not need to enter a customer adjustment note?
(Edited)
Photo of Jodie

Jodie

  • 524 Points 500 badge 2x thumb
Hi Qwerty,

Q1: You mentioned earlier in the thread that this is a Kindergarten. Does government funding you receive relate to the child care rebate? - sort of it is QKFS which is Qld  kindergarten funding scheme, it is a little different to child care rebate as that is day care centers. Same principle but.

Q2: If yes to Q1, does the customer adjustment note in R1 represent the clients rebate? - yes

Q3: If yes to Q2, are you entering the rebate as a customer adjustment note in R1 because the invoice form in R1 doesn't allow you to use a negative line? - yes

Q4: If yes to Q3, in RA did you previously handle this using an invoice with both a positive line & a negative line (for the rebate) & therefore not need to enter a customer adjustment note? - no used adjustment note in RA also.

Thanks Jodie
Photo of Jodie

Jodie

  • 524 Points 500 badge 2x thumb
Hi Qwerty,
                  The other thing that I have noticed is that it does not come off the profit and loss as an expense, so it is not giving an accurate indication in my opinion.

Thanks

Jodie