Date: Fri, 29 Mar 2024 06:13:17 +0000 (UTC)
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This page will describe how to map your general ledger accounts =
in the setup wizard. It is important that this is cor=
rect. As we don't know how your accountant has set up these ledgers, we hav=
e guessed what the values should be.
Step-=
by-step guide
- Open the Setup wizard. Open Settings > Setup Wizard
- Click on Financials
- Move each ledger item from the right into the correct category on the l=
eft
- You can move items into a category by pressing the left arrow (<)&nb=
sp;next to the category you want to add the item to
- You can move items out of categories by pressing the right arrow (>)=
next to the category
- All ledger items must be mapped for correct reporting
What general ledger accounts are visible in th=
e setup wizard
Depending on the industry type, different general ledger categories may =
appear in the setup wizard. Some additional categories have been added to c=
orrect for bookkeeping inconsistencies.
Below are some new categories and the mapping logic for the veterinary i=
ndustry:
- Rebates - it is common for wholesalers and suppliers to give bonuses to=
businesses if they order large volumes. These are often in the form of mon=
ey. Bookkeepers code this as 'income' but realistically this is actually a =
discount on the cost of goods sold. So if rebate income is categorised in t=
he 'rebates' category in profitdiagnostix, then the system will automatical=
ly adjust and reduce the Cost of goods sold by the is value
- Government wage subsidies - it is common in many countries for the gove=
rnment to subsidise wages for varios types of people eg. new parents, disab=
led persons. The most common form of this wage subsidy is maternity leave (=
also called paid parental leave). Bookkeepers legally code this to 'other i=
ncome' but what actually happens is that the government pays the business a=
n amount and then the business pays this exact same amount as wages. So it =
is not actually a true income nor is is a true wage and needs to be removed=
from both places. If you categorise these payments in Profitdiagnostix to =
'wage subsidies', then this adjustment can be made automatically.
Eg. Income Paid Parental Leave would go to Wage Subsidies. If there is an E=
xpense Wage Paid Parental Leave, this will go under Wages. Anything under W=
age Subsidies will be deducted from the wages category.
- Staff hire income - it is common for multi site businesses to have sepa=
rate financial statements for each site, however they often run payroll onl=
y through one site, so ALL the wages are recorded in one site and all the o=
ther sites have no wages. Although this makes business reporting very inacc=
urate, they do this because running separate payroll systems for one employ=
ee who may work at all sites will result in an unfavorable tax outcome for =
that employee. From a bookkeeping perspective the bookkeeper will then 'hir=
e' the staff out to the other sites and code a 'staff hire income' in the m=
ain site where payroll is processed. They will code a 'staff hire expense' =
in the other businesses that are using the main sites staff. The staff hire=
expense will usually represent a market value of the wages that should be =
paid, so this can be mapped to wages in profitdiagnostix. However the incom=
e is not a true income in the main site that runs payroll and it should act=
ually be SUBTRACTED from the wages of this main site.
In Profitdiagnostix, Staff hire income needs to be put into the 'staff hire=
income' category and then the system will know how to adjust the wages cor=
rectly.
Related=
articles
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