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Allied_P's avatar
Allied_P
Experienced Cover User
4 months ago

Provisioning in Balance Sheet

I am wanting to create a few accounts to keep track of liabilities other than Payroll ones (Payroll Tax, Insurance etc).

Essentially these are little "buckets" of money that I want to see in the Current Liabilities of my Balance Sheet.

 

I understand this is done by creating provision accounts in the balance sheet. However, I am not sure how to actually do it in MYOB Account Right.

 

I gather I will have to enter new values each month into these provision accounts to increase/decrease their amounts.

 

Can anyone advise or point me in the righ direction?

 

Thanks

5 Replies

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  • DuncanS's avatar
    DuncanS
    Ultimate Partner
    4 months ago

    Allied_P 

     

    A Tradeoff exists between accounting entries/reporting and time/effort.

     

    The Tax Law allows a Small Business Entity to claim some expenses with a timeframe less than 12 months at the time of payment eg insurance.  Confirm your circumstances with your Tax Accountant.

     

    By Example, a Business Owners might pay $6000 of Insurance (12 months in advance) in January 2024.

    The Business Owner if looking at a monthly/quarterly P&L may wish to allocate at $500 per month.

     

    Thus the tradeoff between proper accounting, time and effort and tax law.

     

    Duncan

    • Allied_P's avatar
      Allied_P
      Experienced Cover User
      4 months ago

      Sorry I have no idea what you are talking about as regards trade off and tax law.

       

      All I want to do is set aside in MYOB categories for things that I know I will have to pay out within the financial year. Insurance is a good example where I put aside $x a month so that when I have to pay the final insurance premium I have the funds available.

      I want to include this under the Other Current Liabilities.

       

  • Doreen_P's avatar
    Doreen_P
    MYOB Moderator
    4 months ago

    Hi, Allied_P

     

    Thanks for your post.

     

    You're on the right track! Creating provision accounts in MYOB AccountRight is a great way to track liabilities other than payroll. To create a provision account, go to Lists > Accounts > click New. For more information about this, kindly check out the Help Article: Adding, editing and deleting accounts.

     

    Please let us know if you require further assistance with this.

     

    If my response has answered your inquiry, please click "Accept as Solution" to help other users find this information.

     

    Best regards,

    Doreen

    • DuncanS's avatar
      DuncanS
      Ultimate Partner
      4 months ago

      Allied_P Doreen_P 

       

      I will give another example, 

       

        Lets say you want to pay a $3000 insurance premium equally over 10 months.

       

        You could do a Journal Dr Insurance Cr Prepaid Insurance for $3000

        Allocate to Prepaid Insurance when the payment of $300 is made.

       

      Once again, there can Tax and GST implications (also Accounting cost implications) of your method.

      I do believe it is best to do Accounting in MYOB on a Payments basis for Insurances.

       

      Internet Banking has improved over the years.

      I understand the Banks provide a listing of upcoming Direct Debit payments.  Monthly Statements also list the Direct Debit Payments during the month.

       

      Duncan

       

       

       

       

      • Doreen_P's avatar
        Doreen_P
        MYOB Moderator
        4 months ago

        Hi, DuncanS

         

        It is great to have this example from a Partner's perspective. We're glad to have you here.

         

        Best regards,

        Doreen

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