Discrepancies on reports

  • 1
  • Question
  • Updated 3 years ago
Should the net income figure on the p&l be different to the net sales figure on the tax liability reports? I am a bookkeeper so I fully understand these reports and would say "no" to this question myself but I am new to Reckon so possibly I am interpreting the reports wrong. But in summary, if I add up all the net sales figures reported on our BAS from the tax liability summary reports these do not equal our net income figure on the P&L for the year, and we charge GST on all of our sales.
Photo of Nadine

Nadine

  • 908 Points 500 badge 2x thumb
  • unsure!

Posted 3 years ago

  • 1
Photo of Kevin Russell

Kevin Russell, Accredited Partner

  • 50,720 Points 50k badge 2x thumb
Why dont you run them as gross and see if it chagnes?
Photo of John Graetz

John Graetz

  • 23,706 Points 20k badge 2x thumb
Hi Nadine.  Another possibility.  Are both sets of reports being run in the same format e.g. both are run on a cash basis or both are run on an accrual basis?  John L G
Photo of Nadine

Nadine

  • 908 Points 500 badge 2x thumb
Hi John
Yes I have checked that they are both set as accrual reports. Thanks for your response.
Photo of Nadine

Nadine

  • 908 Points 500 badge 2x thumb
Ok, I didnt realise this was an option with P&L reports (to run as gross figures), as it isnt with other software programs I am used to. I will give this a try and see if it makes any difference. Thank you for your advice.
(Edited)
Photo of Kevin Russell

Kevin Russell, Accredited Partner

  • 50,720 Points 50k badge 2x thumb
Nadine its an option with every software i use
Photo of Nadine

Nadine

  • 908 Points 500 badge 2x thumb
Ok, good to know. Thanks
Photo of DebonAir

DebonAir

  • 5,952 Points 5k badge 2x thumb
If you find that these figures have not balanced, you might like to run a tax detail report and check that all of the tax codes have been correctly used in sales and expenses. 
Photo of Nadine

Nadine

  • 908 Points 500 badge 2x thumb
Hi DebonAir
Thank you for your response. I have just done this, and I notice that any general journal entries where the tax code has been left out have ended up under "net sales" without a GST entry for some reason, so this is definitely clouding the accuracy of the reports. 
I am more familiar with MYOB than Reckon. In MYOB if you do an internal journal entry etc, you code it to NT (non-reportable). What is the best option for tax coding such entries, in Reckon?
Photo of DebonAir

DebonAir

  • 5,952 Points 5k badge 2x thumb
Hi, the journals can be found in the Tax Exemption Report. You can add in a new tax code as NT if that would make your life easier. I have noticed that people do that in Reckon when they come from MYOB but I never use this myself.
Photo of Nadine

Nadine

  • 908 Points 500 badge 2x thumb
The journals are actually showing up as part of our 'net sales' figures on the tax details report.
Photo of DebonAir

DebonAir

  • 5,952 Points 5k badge 2x thumb
The tax reports select items based on the tax codes and sort accordingly, which is why you might have an invoice in the expenses section of the report if you have used NCG instead of GST and vice versa.
You might need to run a P& L by detail, then add in the Tax Code so you can scan each line to ensure you have the correct tax codes on sales and expenses. 
If your detailed report is very long, then a quicker way to scan is to filter the P&L report by one tax code at a time. This will allow you to quickly find an incorrectly placed tax code. Eg, GST code should not show up in expenses. If you find an incorrectly coded item you can open it and change it quickly. Or, if that has no results, then filter the P&L by No Tax Codes and find items that do not have codes allocated. 
Photo of DebonAir

DebonAir

  • 5,952 Points 5k badge 2x thumb
These 2 reports should always balance if you have used tax codes correctly. 
Did you add the 2 Sales lines together from the tax liability report? You have a line for GST sales and further down there are the GST Free sales. 
Photo of Nadine

Nadine

  • 908 Points 500 badge 2x thumb
Our GST Free Sales has a negative balance and this is due to coding errors which I have now been able to find from running this report you mentioned above. There are a lot of transactions to go through but I can see the benefit of doing it. Thanks so much for your advice.
Photo of DebonAir

DebonAir

  • 5,952 Points 5k badge 2x thumb
As you correct these tax coding errors, you might take a note to check the items or the income account on Chart of Accounts has been set up correctly. If the wrong tax code is in these areas then this will be an ongoing problem if not corrected.
Photo of Nadine

Nadine

  • 908 Points 500 badge 2x thumb
Hi DebonAir
Thanks heaps for your help today. I think I am now on track to sorting out this issue and yes I have most definately fixed the coding errors to ensure this doesnt happen further down the track. I am not new to bookkeeping but new to Reckon and I am still getting my head around the best reports to run for "what" purpose. The one you suggested was just perfect to find the issues. Thanks again.
Photo of DebonAir

DebonAir

  • 5,952 Points 5k badge 2x thumb
Thanks Nadine.  I have always run these two reports to find the errors as it will filter out anything that is not right. Usually the problem  is a missing tax code or an incorrectly placed tax code. This will become second nature to you as time goes by.