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MYOB Payables Reports

We have previously discussed about end-of-year procedures which includes checking the payables account and making sure it reconciles with the amounts reported to in the Balance Sheet report. One of the effective ways to make this objective easy to achieve is to be familiar with the built-in reports in MYOB for Purchases.  Like the previous article, you gain access to these reports by going to the Reports window per the screenshot below:

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In the Reports window, go to the Purchases tab as per the screenshot below:

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The MYOB Payables reports are as follows:

  1. Ageing Summary
  2. Ageing Detail
  3. Reconciliation Summary
  4. Reconciliation Detail
  5. Summary With Tax

Ageing Summary

The Payables Ageing Summary shows all the vendor aged payables per total amount in categories of 0-30, 31 to 60 days, 61 to 90 days and more than 90 days ageing brackets.  If you wish to indicate a specific date for which you want the ageing report, fill in the date on the Ageing Date field as per screenshot below:

 

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As this is a summary type of ageing report, you won’t see the details of invoices due and invoice dates.  If you wish to see the details of the invoices due per vendors as well as the invoice dates, you need to use the Payables Ageing Detail. A screenshot of the Ageing Summary is attached below:

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Ageing Detail

This ageing report shows the details of the invoices and the dates of each invoice based on 0-30 days, 31 to 60 days, 61 to 90 days and over 90 days due as well as payment terms and the due date if you have indicated this information when you have created the supplier or vendor card.  You can also generate report as of a date basis by indicating the date on ageing report you wish to run in the Ageing Date field as shown in the previous screenshot.  A sample Payables Ageing Detail is attached per screenshot below:

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Reconciliation Summary

The Payables Reconciliation Summary shows the Out-of-Balance or variance in the Payables report. The attached screenshot below shows a zero out-of-balance amount.

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In case you run into an Out of Balance of any amount, this could be caused by a bill entered after the invoice payment date and it so happen you are not able to notice when the warning is prompted.  You can also run the Company Data Auditor which is in the troubleshoot for this by clicking on the Accounts command centre.  In the Accounts command centre, click on the Company Data Auditor.  You can also review if you have setup the correct beginning balance as error in amount setup could also result to out of balance amount in the Payables account reconciliation.

Payables Reconciliation (Detail)

The Payables Reconciliation Detail is almost the same as Reconciiation Summary only that it is more detailed showing the  ageing report with details of invoices and invoice dates and the Out of Balance amount.

Summary With Tax

The Payables Summary With Tax shows the total payables per vendor or supplier and showing the outstanding tax due in the next column. This is also a useful tool to know if you have applied the correct tax codes when entering the vendor bills in MYOB especially if the vendor only have one tax codes applicable to all transactions.

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Reconciling Supplier Bills and Statements

One of the most challenging phase of Accounts Payable management is to reconcile your supplier and vendor statements.  Reconciling supplier statements is a very effective activity for you to ensure that the company’s accounts payable are accurate and reconcile with that of suppliers’ statements.

It is best to agree with your suppliers to send a monthly statement of the outstanding invoices with information containing the date of the invoices, invoice numbers and reference like delivery receipt or goods receipt numbers and the amount due.  If you are using a manual system, you can opt to do a few of these steps depending on the statement reconciliation:

  • The first step is to prepare a pro-forma spreadsheet you can summarize to make it easier for you to reconcile the items in the statement and going over your list of outstanding invoices and processed payables invoices to reconcile.
  • Take note of the cut-off date of the statement which may or may not include the invoices already paid as a result of the cut-off date.
  • Based on the reconciliation, indicate the outstanding invoices in your spreadsheet and reconcile the list against unclaimed check payments, unprocessed invoices and those payments processed but still with no checks issued.
  • Take note of the amount differences stated in the statement. These differences may have been caused by discount differences, delivery quantities that are not taken up in the supplier’s records so the need to communicate and reconcile these discrepancies.

If you are using an accounting system like MYOB, it will be easier for you to reconcile the suppliers’ statements.  In MYOB, there are numerous built-in reports like Payables Reconciliation, going through the details in the Purchases Register under the Purchases main command centre or Account Transactions report.

The steps enumerated above are just practical ways to ensure reconciliation of your accounts payable account against your suppliers’ records.  The best way to ensure things are in place is to adopt organized and systematic business processes for the warehouse or receiving department, like ensuring the warehouse or receiving department have noted differences on the delivery invoices properly noted by the responsible supplier representative.  Suppliers’ receiving delivery receipt copies should also be noted with the discrepancies on the deliveries of items.   Ideally, adopting the practice of having a scheduled receiving of supplier documents and an accountable person for receiving of supplier invoices or countering/receiving of supplier receipts also have advantages, rather than have the invoices received by just any of the staff.

MYOB Accounts Reports

In the previous articles, we have discussed about built-in reports in MYOB for Profit and Loss and Balance Sheet.  This article, however, discuss on the built-in Accounts Reports in MYOB.  To access this group of reports you also follow the same link like accessing the Profit and Loss and Balance Sheet reports by going to Reports window as per screenshot below:

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The group of Accounts Reports actually are the first group of reports you see when you click on this option as per screenshot below:

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The Accounts reports in MYOB composed of the following:

  1. Accounts List Summary
  2. Accounts List Detail
  3. Account Transactions (Accrual)
  4. Account History (OfficeLink)
  5. General Ledger (Summary)
  6. General Ledger (Detail)
  7. Trial Balance
  8. Linked Accounts

Accounts List Summary

The Accounts List Summary shows all the accounts grouped into Assets, Liabilities, Equity, Cost of Sales, Income, Expenses, Other Income and Other Expenses including the amounts entered into MYOB.  Please do take note that the accounts depends on the Chart of Accounts you have setup during the company data file creation or those you have manually created.

Accounts List (Detail)

This report contains the account lists showing the accounts by Type, Debit or Credit, if it’s a Header or Detail; Level, the amount Balance and the default Tax Code as per screenshot below:

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Account Transactions (Accrual)

 This report shows the accounts summary in balance of Debit or Credit for the period and don’t accounts transaction details.

Account History (Office link)

Shows all the accounts with its Opening Balance and the budgeted amounts per month as per the screenshot below:

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General Ledger Summary

The General Ledger Summary provides you the accounts and the accounts code, transactions Beginning Balance, Debit, Credit and Net activity and the accounts  Ending Balance.

 General Ledger Detail

This report is almost the same as the General Ledger Summary only that this is more detailed showing the Opening Balance, Debit and Credit, Date of accounts transactions Job Number, Net Activity and Ending Balance.

Trial Balance

This report of course include the Accounts and the total Debit, total Credit as well as the YTD Debit and YTD Credit.

Linked Accounts

The Linked Accounts report shows all the accounts that are linked to default accounts in MYOB.  These accounts include those you have created and linked as well as MYOB’s default linked accounts as per screenshot below:

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Reviewing Profit & Loss Statements

 Reviewing Tax Booklet

One of the most important financial reports to be periodically reviewed is the Profit and Loss Statement.  Whether you are the business owner, accountant or bookkeeper assigned to this task, you should always make sure that this report is periodically reviewed.  A monthly review is reasonable after the month-end accounting transactions cut off and of course, when all the routine monthly tasks are made including the monthly adjusting entries.

As a business owner, the more you have to make sure you have done the periodic review of the monthly profit and loss. It is not enough that you have devoted much time to generate sales and grow your customer base, or even beat or be on the lead among the stiff market competition.  Reviewing the profit and loss statements periodically is equally important to making the business grow and evaluate the profitability of the business as well as evaluating adherence to prescribed operating budgets and ascertain reasonability of the setup budget and the need to increase or decrease these budgets especially for those uncontrollable and controllable costs based on the evaluation of the profit and loss report. When you have done the review periodically, this will also make you ask questions to the accountant or bookkeeper.  There are times that the accountant or bookkeeper have errors or omission in recording accounting transactions, which could affect the profit and loss statement.

When you are reviewing the profit and loss statements, it is best that you compare the current month profit and loss from the previous month or all the previous months of the accounting year.  This will give you an eagle’s eye view of the business profitability as you will be able to compare the profit and loss items for increase or decrease in profits.  In real life business world, not all increases in sales mean that profits are also increased.  These increases in sales are always associated with sales and marketing expenses on gaining new markets and customers.  Business decision-makers might cut down on operational costs but also increase the sales and marketing costs in the process.  Based on this real business world scenario, review of the profit and loss lay the groundwork for a more informed business judgment to making the business grow as it should.

If you are the company bookkeeper or accountant assigned with the task of reviewing and submitting the financial reports, you have to do this task periodically, preferably on a monthly basis.  Reviewing the profit and loss before submission to management also gives you the leverage to review the financial statement.  Most often, this help you to identify errors or omissions in recording.  Take for instance, the delivery expense or freight out account have increased by 50% than the previous month profit and loss data but the sales is only increased by 2%.  This for sure will raise questions, you have to review the general ledger entries.  Most often, this would need correction or reclassification entries if there is a material amount of transportation costs for importing unsold products that is already charged to this month’s cost of sales or taken up as period costs.

Reviewing the profit and loss statement not only result to discovery of mistakes or errors but also as a basis of effectively evaluating the business operations and its profitability to make informed sound business judgment for maximizing profits.

MYOB Profit and Loss Reports

MYOB have built-in reports that enable you to analyze the Profit and Loss statement for your company.  These reports are found on the Reports window right below the main command centre as per screenshot below

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You will be directed to the Reports window and you click on the Accounts tab as shown in below screenshot:

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The reports under the AccountsProfit & Loss are as follows:

  1. Profit and Loss (Accrual)
  2. Multi-Period Spreadsheet
  3. Multi-Period Budget Spreadsheet
  4. Year to Date
  5. Last Year
  6. Percent Sales Analysis
  7. Last Year Analysis

Profit and Loss (Accrual)

This Profit & Loss Report shows the result of business operations using the accrual basis.  All the revenue and expenses accounts that are active in MYOB are shown in this report even if they have zero balances.  This report has no option for multi-period or comparative period data, but only on a date range report, example, January 1, 2015 to March 31, 2015.  This report will then show the total profit and loss statement from January 1, 2015 to March 31, 2015.

Multi-Period Spreadsheet

This report shows the Profit and Loss using the multi-period in terms of months.  This multi-period spreadsheet format shows the profit and loss on a comparative monthly basis, which could be from previous months or 12-month period for the whole accounting year, for instance, January to December, 2015 profit and loss.  This report will enable you to make a comparative analysis of the business operation results and it would be easier for you to spot increases or decreases on profit and loss components.

Multi-Period Budget Spreadsheet

Budgeted Profit and Loss for the period on a comparative monthly basis is shown in this report.  You can generate this report in a 12-month period spreadsheet or any number of previous months.

Year to Date

This Profit and Loss Year to date report also gives options for the month range reports and shows the total amounts only for the selected period.  The difference of this report from other reports is that this provides percentage analysis of the profit and loss items, thus giving you comprehensive analysis on the sales, cost of sales and expenses components as per screenshot below:

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Last Year

This Profit and Loss report shows comparative report from that of last year and percentage sales, cost of sales and expenses.

Percentage Sales Analysis

This report shows the current period actual and budgeted profit and loss and the last year comparative profit and loss and the percentage growth/decrease analysis.

Last Year Analysis

This is the simplified version of the Percentage Sales analysis which shows the current period profit and loss compared with the last year, amount difference as well as the percentage difference.

Budget Analysis

This report shows the current profit and loss compared with the budgeted profit and loss for the period, difference in amounts and the percentage difference.  This makes your analysis of the results of current period operations against the budget quick and easy.

If you have not taken the time to explore the Accounts – Profit and Loss reports as stated above, it is high time you start doing so to appreciate how much MYOB has made useful reports so quick and easy for you to generate, saving your time and effort on the process.

Monthly Accounting Checklist

Monthly-Accounting-Checklist

Most often, successful bookkeepers and accountants prepare a monthly accounting checklist for them to be able to organize accounting activities and leave little or no room for errors or omission in carrying out their job.

If you are a full-scope accountant handling all accounting works from accounts receivable, accounts payable, monthly reconciliation, adjusting entries, financial statement preparation and analysis before submission to the management, then you have a different monthly checklist as compared with that of a more specialized accountant handling only accounts receivable, or accounts payable, general ledger or financial statements reporting. It is important to note that while you have a checklist of the monthly routine transactions, you should also observe cut-off period.

For full-scope accounting work or business owners who handle all financial transactions recording, you can create your own checklist and this checklist might be grouped into several categories. If you are using a spreadsheet for this checklist, then you have more than one worksheet that further breaks down the checklist.  You can opt to break down the checklist into any of the categories below:

  • Accounts receivable – aside from taking note of recording checklist and taking note of very important customer monthly recurring transactions, you can also include the sending of periodic monthly statement of accounts, analysis of aging reports can also be included in this checklist.

 

  • Accounts Payable – you can also include the sending of statements to the suppliers confirming end of the month balances as well as analysis of aging reports. 
  • Accrual – If you are using accrual method of accounting, then monthly accrual of expenses like petty cash fund replenishments and other unbilled payables and invoices have to be taken notice of. Accrual recording is very important to accurately match revenues and expenses for the period they are incurred.
  • Reconciliations – you can include in this checklist the normal routine reconciliations done – cash on hand, cash in bank accounts, general ledger vs. subsidiary ledger and other accounts.
  • Trial Balance – be sure to include in your checklist a review of your Trial Balance. Most often, review of trial can also make it easier for you to spot errors, omission in carrying out your routine monthly transactions.
  • Balance Sheet – you can also indicate in this checklist the reconciliations done as well as the fixed assets, accounts payable and other items. This is aside from the normal review of the Balance Sheet before finalizing the report. Be on the lookout to spot negative balances on the balance sheet accounts.  Most often, the negative balances are caused by errors or errors in accounts being used in recording transactions.  If not, be prepared to provide answers as to why accounts are negative.  This is in exception of course, if the business operations result in recurring losses so that negative retained earnings would be reasonable. A comparative balance sheet with that of the previous month or months would be more ideal for review and evaluation purposes, as it makes it easier for you to spot significant increases or fluctuations of balance sheet accounts.
  • Income Statement – be sure to also review Income Statement compared to previous months to make it easier for you to spot significant fluctuations or increases in the profit and loss accounts and better analysis of the business operation results.

Please take note that preparation of monthly checklist should be done to ensure that all items are properly done and must be revised from time to time for any changes to make it most useful.

Reconciling Inventory Physical count vs. MYOB inventory

This article aims to discuss the methods of reconciling your physical inventory count versus your MYOB system inventory balance. MYOB uses the Perpetual inventory system in accounting for inventory.  It would be good to have the inventory items reconciled based on MYOB inventory balance and the physical count.  If there are variances, the best way to verify its accuracy is to seek written confirmation with the custodian in regards to the inventory shortage. The shortage will be charged against the inventory custodian.  Generally, the inventory or warehouse custodian is responsible for keeping track of the inventory movements – both going in and out as well as properly reporting inventory damages and keeping track of expiry dates in case of perishable goods. The following are tips on being able to reconcile the physical inventory count and MYOB inventory balance:

  • Ensure that the item location is properly indicated in the Purchases and Sales entries in MYOB if you have multiple item locations.
  • Ensure that the Purchases and Sales transaction entries in MYOB uses the Item
  • Ensure items received and recorded into MYOB reconcile with the suppliers delivery receipts and invoices. Any delivery discrepancies should be immediately resolved and adjustments to quantities also effected into MYOB.
  • Immediate and periodic recording in MYOB for any inventory physical movements that result to count inconsistences – shrinkages, damaged items, customer item returns, customer item replacements.
  • Closely tracking inventory movements in the storage location and observing the high level of internal control always result to more accurate inventory counts.

 MYOB Inventory Count Sheet

With the use of MYOB, you don’t need to prepare manual spreadsheet for the count tally sheet.  All you have to do use the Inventory main command centre and click on Count Inventory as per screenshot below:

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The Count Inventory page which shows option to Include Zero On-hand Quantities as per screenshot below:

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Above screenshot shows inventory count with no discrepancy or difference.  In this case, you don’t have to click on the Adjust Inventory tab.

Count Inventory with Count Difference

In case the count has variance or difference, you would need to do the Adjust Inventory option to be able to generate adjustment to both the inventory quantities and account transactions.  Take note that adjustments to be made in MYOB depends on the cause of the inventory variance and here are some guidelines to enable you to properly perform the reconciliation:

  • If the inventory variance is caused by being not able to Receive the items from the supplier deliveries and causing unrecorded Supplier Bills, you should not use the Adjust Inventory option in MYOB. You should record the items delivery using the Purchases main command centre as you record the normal deliveries/invoices from your supplies and vendors. This will result to both the recording of the inventories coming in to your warehouse and the Purchases bills as well.

Confirmed inventory shortages should be adjusted in MYOB using the Adjust Inventory option as per screenshot below showing inventory shortage to two inventory items below:

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Adjust Inventory           

In recording inventory adjustments in MYOB, you have the option to setup a default expense/income account for inventory discrepancies.  In case of inventory shortages, you can setup a default expense account Inventory Loss/Shortage account.  In case the shortage is chargeable to the warehouse custodian or other responsible staff, you need to use the Advances or receivable from employees account.  Below is a screenshot of MYOB reminder for this option:

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If you continue without having to indicate the default adjustment account, you would need to indicate the Account in the inventory adjustment journal as per screenshot below:

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