Posting COVID19 Business Stimulus

  • 2
  • Question
  • Updated 2 months ago
Cash Flow Boost COVID19 - How do i process in Reckon Hosted the $10K cash flow boost just received from the ATO into our business account?
Photo of Debbie Maiden

Debbie Maiden

  • 100 Points 100 badge 2x thumb

Posted 2 months ago

  • 2
Photo of Bruce

Bruce

  • 3,316 Points 3k badge 2x thumb
Credit a new "other income account", say covid-19 cash flow boost
Debit "bank" or if the funds are showing on your Integrated Tax account a new "other current asset"

If you receive JobKeeper use a separate "other income account" - JobKeeper is taxable and Boosting Cash Flow is not
Photo of John Graetz

John Graetz

  • 28,864 Points 20k badge 2x thumb
Belinda.  Just entering it as Make Deposits is not a good way to do this because there is absolutely no way to flag any GST codes.  Ideally you should be entering is a Receipt or by way of a General Journal where you can specify tax codes or no tax codes.
John L G
Photo of Kris Williams

Kris Williams

  • 12,008 Points 10k badge 2x thumb
I thought no tax code was required as it is not taxable
Photo of Bruce

Bruce

  • 3,316 Points 3k badge 2x thumb
Kris
You are correct - this amount does not reported for GST.   (This part of the thread started from Belinda's comment above that it was appearing in G1, and not being able to determine why this is happening.)
(Edited)
Photo of John Graetz

John Graetz

  • 28,864 Points 20k badge 2x thumb
Kris.  I was merely using an example of why you don't use Make Deposits, which is really designed for clearing Undeposited Funds into a bank deposit, as you have no control through that medium for reporting on anything to do with GST.  I am aware that this particular item is not subject to GST.
John L G
Photo of Kris Williams

Kris Williams

  • 12,008 Points 10k badge 2x thumb
I do agree with you regarding the deposit window, there are times when it’s acceptable to use it, but important for people to know the difference. 
Photo of Shirley Ingle

Shirley Ingle, Accredited Partner

  • 2,992 Points 2k badge 2x thumb

Hi Debbie  If you are referring to RAH and the $10k credit you received against the BAS, then this is my work around.
Create Other Liability Account and call it ATO BAS Credit. Then make a Journal entry. Debit ATO BAS Credit 10000.00 and second line Opening Balance Equity Credit 10000.00
Then process your BAS payment as normal, picking up in Process Payroll Liabilities and tick the PAYG amount. Create and come over to the Make Cheques screen and click on the Expenses tab.
Enter Tax Payable 1A amount, second line Tax Payable  minus amount 1B and third line ATO BAS Credit minus.
When you look at the Current Liability Account you will see the $10K and the amount of this BAS deducted leaving a balance. Hope this is what you wanted.

Photo of Bruce

Bruce

  • 3,266 Points 3k badge 2x thumb
Shirley
Could you explain the rationale behind using an Equity account?
Photo of Shirley Ingle

Shirley Ingle, Accredited Partner

  • 2,992 Points 2k badge 2x thumb
Bruce  It was the only account I could think to use as the money will not be deposited to your bank account so Bank is not an issue.
Photo of Debbie Maiden

Debbie Maiden

  • 100 Points 100 badge 2x thumb
Ours was deposited to our bank ac; actually part went against April PAYG in the ATO Integrated AC and the remainder posted to our bank account.
Photo of Bruce

Bruce

  • 3,266 Points 3k badge 2x thumb
Shirley
I think it is an error to use an equity account.   I have always been taught that this was to be used for owners equity, share capital, retained earnings.  

I have created a new "other current asset" to record these funds (whilst they are still showing in the ATO Integrated Client Account) as this reflects what they are.
Photo of John Graetz

John Graetz

  • 28,864 Points 20k badge 2x thumb
I agree totally with you, Bruce.  I have also toyed with the idea of creating a Supplier Credit note with the ATO to handle the receipt, but the ATO Integrated Client Account Asset Account is a valid way to go and is probably the easiest solution.
John L G
(Edited)
Photo of Shirley Ingle

Shirley Ingle, Accredited Partner

  • 2,992 Points 2k badge 2x thumb

Hi All At the time of writing a response I was not aware that the ATO were depositing the difference. I thought that the difference between the BAS and the $10000 was going to stay as a credit. So I would delete the Journal altogether and for the deposit code it to ATO BAS Credit. As far as using Opening Balance Equity account, there is no black and white.  In another example, if you were starting a new file for a client and bringing in balances, the other side of the entry is Opening Balance Equity. That is the account Reckon puts the amount if when setting up say a bank account in the Chart of Accounts.
Photo of Bruce

Bruce

  • 3,266 Points 3k badge 2x thumb
Shirley
I still strongly disagree with the concept of using the Opening Balance Equity account.  This is just not the account to be using for random uncategorised entries into.   (To use your words from earlier "it was the only account I could think to use".)   
It is also a misnomer because it is, most definitely, not an opening balance 

The example of a new file doesn't work for me because this is not a new file and, even then it would only fall into the Opening Balance Equity if it were into a new financial year.  
Photo of John Graetz

John Graetz

  • 28,864 Points 20k badge 2x thumb
Again, I have to wholeheartedly agree with you, Bruce.
John L G
Photo of Kris Williams

Kris Williams

  • 12,008 Points 10k badge 2x thumb
I enter a bill dated the end of the BAS quarter, posted to Group Tax and Tax payable,  when I have to deal with the BAS payment, and if the Bonus means nothing to pay, I have been adding a negative amount of the total bill and posting it to Other Income account called Gov Subsidy. So the bill is zero. When the balance Of bonus is banked I deposit that against the same Gov Subsidy account. I know many people will have a different way to deal with this but this has been my method for 20 years and I find it very easy
Photo of Shirley Ingle

Shirley Ingle, Accredited Partner

  • 2,992 Points 2k badge 2x thumb

Thank you Bruce for your input. Accounting is certainly an interesting subject. Enjoy your evening.

I would normally agree with John in that all income should be recorded via a Tax Invoice or Sales Receipt in order to ensure the correct tax code can be used, however as the Cashflow Boost is not Assessable Income & no tax code is required, I post it via Make Deposits directly back to the relevant PAYGW liability account as this is what it actually is ... a credit against PAYGW!

 

Just a note however that doing this may require future adjustments of your Payroll Liability Items as this will not be being reflected there.

 

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com


It is imperative that your Tax Accountant or registered Tax Agent will tackle this issue. This is NANE , Non Assesable   Income  "All cash flow boosts are tax free (non-assessable non-exempt income) and are not required to be paid back when the business' cash flow improves. 
This will be reflected correctly in the respective Tax practice software.
Any business is having issue this year with the Tax LODGEMENTS this year, we will service you with 50% reduced fees.