Thank you for visiting our Partner Zone. This area is an exclusive space for MYOB Partners. Find out how to Partner with MYOB.
March - last edited March
I'm a new leaner of MYOB essentials. Now my employer wants to start a new business, which is based on cash accounting. By this I mean, the new business recognizes revenue when it receives the payment and recognizes expenses when it pays money out.
In this condition, do I even need to "create bills" and "create invoices" under "Purchases" and "Sales" function respectively? I'm wondering whether I can use the "spend money" and "receive money" under the "Banking" function, since it'll be much easier and I don't need to follow up the accounts payable or accounts receivable.
I know that, basiclly, we "create a bill" to record a payment to a supplier who is in our contact list and "spend mony" to record some other less frequent expenses like bank charges or gas expenses. However, if I record all the expenses via "spend money", does it matter a lot? Actually, I don't need to pull reports on any specific supplier. So in my understanding, it doesn't matter if I record all the expenses in "spend money".
Is anyone can help me with that? Thanks a lot in advance!
Solved! Go to Solution.
Thanks for your post. To determine whether a bill should be entered as a Purchase or Spend Money transaction you need to look at when payment is made. If you pay at the time of purchase you can record a Spend Money transaction.
However if you pay later, eg you have a 30 day account, you would record the purchase as a Create Bill transaction. There's a couple of reasons for doing this:
1. allows you to track and reconcile supplier accounts before making payments
2. provides accurate financial reporting
When you record a Create Bill transaction the journal created debits the applicable expense/cost of sale account and credits the Trade Creditor account. Paying the bill debits the Trade Creditor account. This means that when you run financial reports like the Balance Sheet and Trial Balance the company's liabilities are accurately reflected. If these purchases were entered as Spend Money transactions when payment was made, the Balance Sheet wouldn't show how much money the business owed to it's suppliers so the equity would be incorrect.
The same principle is used for income transactions and determining whether to use Receive Money or the Sales function. If a customer has 30 days to pay their account, you would record a Create Invoices transaction.
If you're not sure how to record transactions to suit your business requirements I do recommend speaking to your accountant.
Please let me know if you need further help.
If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.
3 weeks ago
Following on from that. If I have created an annual invoice for a tenant to pay rent, each month they pay I have been going into Bank Transactions/ Match Transactions/ All Transactions and then just allocating the amount they paid in my bank statement off of the annual invoice. That has worked well. But now I have an agent looking after the tenants and the amount I get paid is less his commission. So I can no longer just tick off the payment. Any advice on how I manage the rental payments less the commission if I want to keep track of the annual amounts paid by the tenant? Hope that makes sense.
3 weeks ago
You could edit the sale invoice to add a line for the commission and reduce the amount owing, which can then be matched with the payment.
Another option would be to use a contra account. If you don't already have a contra account you can create one as an asset account with the Type set to Bank. You would need to record a Create Bill transaction for the agents commissions. Record a Take Payments for the whole invoice amount and change the Into account to the contra account. Record a Pay Bills for the agents commision and change the Into account to the contra account.
Then record a Transfer funds transaction for the amount that you have received, the Transfer from account is the contra account and the Transfer to account is your bank account.
For example, the tenant pays $550, the agent commission is $50 so the actual payment received is $500:-
Please let me know if you need further help with this.