opening entry with open customer inv gst prior period

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  • Updated 4 months ago
Hi, 

I am trying to do an opening entry into Reckon.  

As per the migration post I entered the outstanding customer invoices. The problem is there is an invoice from a prior tax year, and others another from a prior BAS period.  I am unclear how is the best way to account for the gst componet.

If I enter as normal the GST payable is higher than necessary.  I can enter the prior BAS period invoices with no GST code and reduce the sales figure so the trial balance is in balance, would that be right.

My main problem is the open invoice from a prior income tax year, how can I enter it without it affecting the GST payable or retained earnings? and therefore my trial balance

Regards
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Hig Daisy

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Posted 4 months ago

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Graham Boast, Accredited Partner

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Hi Hig

My process for these is as follows:

  • create an "other Charge" item called "OpenBal" linked to the equity account "Opening Balance Equity".  If you are cash basis GST, the item should use the GST code so the GST is picked up when the invoice is paid.  If you are accrual GST, leave the tax code blank.  I uisually add to the description "Open Balance at dd/mm/yyyy".

  • Create an invoice for each open invoice using the above code.  Keep the Invoice Number and date as per the original.  Each invoice should have a single line using the above code.  The exception to this is where you are cash GST and your invoices have a GST Free component.  In this case, you will need to enter 2 lines - one with the FRE code for the GST Free component; and a second line with the GST code for the remainder.

  • You will need to create an Adjustment Note for open Adjustment Notes AND Unapplied Payments.

  • You will need to clear the opening bal equity account with a journal.  If you have already entered the balance sheet via a journal, just do an extra journal as follows:

    Accrual GST
    Dr Opening Balance Equity, Cr Other Income (which will adjust Retained Earnings)

    Cash GST
    Dr Opening Balance Equity, Cr Other Income Cr GST Payable

  • You can enter separate journals for each financial year.

If you have lots of transactions to enter, I can create transaction files from your old file that can be imported into your new file.  I do the same for Accounts Payable and Inventory balances.  I charge for this service, but it is cost-effective if you have a large number of outstanding transactions.

Graham 0409317366
graham@reckonhelp.com.au


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Hig Daisy

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Graham, 

Thank you that worked, and was easy to understand.

Regards