Frequently asked questions
Need help with your MYOB or XERO bookkeeping? Ask a question to learn more about your MYOB or XERO for free! We will endeavour to respond within 48 hours.
1. What is the difference between profit & cash flow?
Profit is basically the difference between sales/revenue and costs, within a specified period.
Cash flow is the daily movement of money in and out of your business. Money comes in from sales and money is paid out to meet supplier bills & other commitments such as loan payments, equipment purchases and drawings.
Whilst your business may be generating profits, you may experience cash shortfalls if sales receipts are deferred (when customers are given credit) while supplier payments, wages & loan payments etc are being made.
2. How do I account for a sales payment I have received twice or a bill I have paid twice?
Enter the second payment the same way as you did the first, but ensure that in the Receive payments/Pay bills screen you tick the box ‘Include Closed sales/Closed Purchases’. Manually enter the amount in the amount applied column against the invoice/bill to balance the amount received/paid at the top (make sure the out of balance equals zero). A message will appear that a credit/debit note is being created. This can either be applied against a future sale/purchase when the time comes or payout/receive as a refund through Returns & credits/debits.
3. How do I prepare a GST return with MYOB?
- Review your GST codes used in transactions for the period by running the Company Data Auditor in the Accounts command centre and make any necessary corrections.
- Print a GST detail report (payments or invoice) depending on your GST accounting basis, for the GST period. Check the report transactions and keep this report with your copy of the GST return as it provides a breakdown of the amounts supplied to the IRD.
- Print your GST Return from the Accounts command centre - Prepare GST Return. Select the last month in the GST reporting period, GST reporting frequency, GST accounting basis and GST output & Input tax adjustment codes.
- When you pay your GST to the IRD or receive your refund, code the transaction to the liability code 2-1350 GST Payments/Refunds
4. What is the difference between Pay Bills and Spend Money?
You enter bills in the ‘Enter Purchases’ screen when a supplier has allowed you credit terms to pay the bill at a later date eg: 20th of the following month. You can then print an Accounts Payable list to see what bills are outstanding. You then use ‘Pay Bills’ to apply the payment against the outstanding purchase.
Spend Money is for when you buy something and pay for it at the same time (no timing difference between the expense being incurred and its payment). You can still select a supplier card in Spend Money, so the transaction appears in your supplier reports. Spend Money can also be used for other payments that don’t have invoices eg: drawings, rent, wages, loan payments, rent etc.
5. How do I fix my accounts receivable/payables if they are out of balance?
MYOB has provided a Receivables/Payables exception report under the Accounts tab of the reports screen. When you view the report it can identify possible causes for the out of balance amount. There are a few different reasons as to why this might happen, we have listed some below:
- The customer/supplier payment was recorded through receive money/spend money (posting directly to the Trade Debtors/Creditors account) instead of being recorded in Receive payments/Pay Bills.
- A customer/supplier payment entered was dated prior to the date of the actual invoice/bill
- An incorrect allocation account was used for a sale/purchase eg: allocated to Trade Debtors/Creditors instead of an income/expense account.
6. How do I refund an employee in Payroll for a deduction that has already been paid in full?
Process a negative quantity against the deduction pay code in the employees next pay. By entering a negative quantity against a pay deduction, this will generate a refund to the employee.
7. How do I enter cash drawings withdrawn from my bank account or where part of another transaction?
Enter cash drawings via Spend Money and allocate the payment to your applicable drawings code or split code the transaction so that the drawings amount is coded to your drawings code and the other expenses are coded to their relevant expense codes.
Soletraders or partnerships should use Equity codes for their drawings eg: 3-0510 Cash Drawings. Companies should use a current liability code which forms part of their Shareholders Current account eg: 2-1600 Shareholders Current Account (header), 2-1610 Opening Balance, 2-1630 Capital Introduced, 2-1670 Drawings.
8. How do I enter cash drawings in MYOB that I have taken out of my sales receipts and then banked the balance of the sales?
Firstly, record the customer sales receipts as normal making sure you select the 'Group with undeposited funds' option. Then go into Banking - Prepare Bank Deposit - enter the date the funds were banked and choose/tick the applicable transactions.
Click on 'Deposit adjustment' at the bottom of the screen and enter the amount that was taken as drawings, choose your drawings account code as the expense account and Record. You will now have a negative amount showing for the cash drawings. Select/tick this amount so that the total deposit matches the amount that was actually banked. Once recorded the net amount will now show in your Bank reconciliation screen.
You can also use the same process where the bank has deducted fees directly from your deposit (FX or TT's) or where other expenses need to be entered against receive payments transactions.
9. How do I enter loan repayments in MYOB?
Enter your loan payments via Spend Money and code them to the same liability code that the original loan advance was coded to. You can save the loan repayment entry as a monthly recurring transaction and create a reminder to 'pop-up' when it is next due to be recorded.
10. How do I fix a bill that was paid, but entered the wrong amount?
Depending on what version of software you have, you may have the ability to change the Chq no., date, memo & Pay from account, after a payment transaction has been recorded, but you cannot change the amount. You need to delete the payment and re-enter it for the correct amount. Firstly complete a backup, then locate the actual payment and click into the arrow so that the Pay Bills screen appears. Go up to Edit - Delete Payment. Go back into Pay Bills and apply the correct payment amount to the relevant bills. If the incorrect amount has already been reconciled in the Bank reconciliaton or it was recorded in a previous month or previous financial year, then the incorrect amount should be reversed into the current month instead of being deleted. To reverse transactions, you first need to go to Set-up - Preferences - Tick 'transactions can't be changed'. Your Edit option will now change from Delete payment to Reverse payment.
11. How can I find out what has been paid in MYOB as Spend Money or Pay Bills?
Go into Reports - Banking - Cash Disbursements and click customise. Choose the applicable dates and select Source Journal 'Disbursements'. Transactions that make reference to Trade Creditors will have been recorded via Pay Bills and all other transactions will have been recorded via Spend Money. The Disbursements journal shows all banking withdrawals from all bank accounts including transfers between accounts.
12. Are there any security controls with MYOB?
Yes. You can give all users of the software their own login username & password. You can also restrict a particular users access to specific functions of MYOB. To do this, go to Set-up - Preferences - Security - UserIDs and select the particular username and select the relevant functions/areas you wish to restrict.
13. How do I enter an expense in Receive Money?
If you have a Receive Money transaction which has been deposited and it is the combination of an expense and income etc then you can split code the one transaction. Eg: If you received $2,000 in your bank account and it was for a $3,000 income tax refund but $1,000 had been deducted for accountancy fees before it was banked, you could enter the Amount Received as $2,000 and then at the bottom of the screen, code the $3,000 to your applicable income tax refund code and the remaining amount of $1,000 will show as a negative amount (expense) which can be coded to your applicable Accountancy Fees code.
14. How do I post my income tax refund in MYOB?
Enter the income tax refund via Receive Money.
Soletraders or partnerships should use Equity codes for their income tax refund eg: 3-0503 Income Tax Refund. Companies should use a current liability code 2-1400 or current asset code 1-2400 called Provision for Taxation.
15. I paid the wrong creditor, how do I fix this?
You need to delete the payment that was applied to the incorrect creditor and re-enter it for the correct creditor. Firstly complete a backup, then locate the actual payment and click into the arrow so that the Pay Bills screen appears. Go up to Edit - Delete Payment. Go back into Pay Bills and apply the payment amount to the correct creditor. If the incorrect payment has already been reconciled in the Bank reconciliaton or it was recorded in a previous month or previous financial year, then the incorrect payment should be reversed into the current month instead of being deleted. To reverse transactions, you first need to go to Set-up - Preferences - Tick 'transactions can't be changed'. Your Edit option will now change from Delete payment to Reverse payment.
16. How do I enter a sales return in MYOB?
If all of the goods are being returned from the original invoice, then to easily create your credit note, go to Set-up - Preferences - Tick 'transactions can't be changed' and then locate the original sale. Click into the arrow so that the invoice appears on the screen. Go to Edit - Reverse invoice and update the memo and other details to recognise that this is a credit note & record. Go to Settle Returns & credits and click either offset the credit note against the original invoice (if it hasn't yet been paid) or click pay refund if you are going to refund the customer, or leave the credit ready to apply against a future sale.
If only one item or part of the original invoice is being returned, then go to Sales - Enter sales and enter negative amounts or quantities for the goods being returned and update the memo and other details to recognise that this is a credit note & record. Go to Settle Returns & credits and click either offset the credit note against the original invoice (if it hasn't yet been paid) or click pay refund if you are going to refund the customer, or leave the credit ready to apply against a future sale.
17. How do I enter a supplier credit for a bill in MYOB?
If all of the goods or charges are being returned from the original bill, then to easily create your debit note, go to Set-up - Preferences - Tick 'transactions can't be changed' and then locate the original bill. Click into the arrow so that the bill appears on the screen. Go to Edit - Reverse bill and update the memo and other details to recognise that this is a debit note & record. Go to Settle Returns & debits and click either offset the debit note against the original bill (if it hasn't yet been paid) or click receive refund if you are going to be refunded, or leave the debit ready to apply against a future purchase.
If only one item or part charge of the original bill is being returned, then go to Purchases - Enter Purchases and enter negative amounts or quantities for the goods or charges being returned and update the memo and other details to recognise that this is a debit note & record. Go to Settle Returns & debits and click either offset the debit note against the original bill (if it hasn't yet been paid) or click receive refund if you are going to be refunded, or leave the debit ready to apply against a future purchase.
18. Which default expenses & income accounts don't attract GST?
Bank Charges, Depreciation, Interest paid, Wages (where PAYE deducted), Income Tax Expense and Interest Received do not attract GST.
19. Early loan payout entries in MYOB?
Code the early loan payout amount to the same liability code that the original loan advance was coded to. Depending on the type of loan, further entries may need to be recorded in MYOB to clear out any remaining loan balance & unexpired interest in the balance sheet to an expense code (Interest paid) in the Profit & Loss statement. This can be done via Accounts - Record Journal Entry. Please feel free to contact us or your Accountant for assistance with this entry.
20. How to enter an employee deduction to pay an invoice in MYOB?
MYOB Payroll - Create a Post-tax deduction Pay code under Maintain Pay codes. Add this new pay code to your employee's pay defaults under Maintain Employees. If the amount doesn't change each pay then enter the amount under Pay defaults and change the type to regular, otherwise leave it as variable so you can enter an amount each pay.
MYOB Accounting software - Create a credit note 'Service layout' (negative sale) coded to wages and offset this against the original invoice in Settle credits & returns. This will clear the balance owing on the invoice and increase the wages expense account to reconcile the Gross wages paid for the employee. If your MYOB Payroll is integrated to your Accounting software, then code the credit note to your Payroll clearing account (to offset the amount of the deduction in the wages journal)
21. End of period procedures
22. End of year procedures
23. How do I record PAYE in MYOB?
If you have your payroll system integrated with MYOB then the PAYE attached to your wages will be imported to the PAYE tax payable liability code in the balance sheet. When you pay your PAYE all you need to do is create a spend money transaction and code the payment to the PAYE tax payable liability code to offset it.
If you don't have a payroll system or don't intend to integrate, then the easiest way to account for PAYE is to enter a bill each month against the supplier card 'IRD'. Make sure you date the bill the month that the PAYE relates to eg: 31/01/10 for January 2010. Default the terms of the supplier card to be 20 days after EOM so it shows as due for payment on 20/02/10 and will appear in your creditors report. When you pay your PAYE go into Pay bills to record the payment.
Either method will mean that the wages figure in your Profit & Loss report will be the Gross wages amount for the period. This will allow for easy reconciliation between your PAYE returns and/or payroll system.
24. How do I receive interest income from the bank & record tax deducted from the interest?
When you are in your Banking Command Centre - Reconcile Accounts, and you have chosen the applicable bank account, there is a button at the bottom called 'Bank Entry' which allows you to record both of these transactions at once.
In the top section called 'Service Charges' enter the amount of RWT, the date deducted from your account and the expense account should be either an Equity code eg: 'Drawings - Personal taxes' (for sole trader) or Asset/Liability code 'Provision for Taxation' (for company).
In the bottom section called ' Interest Earned' enter the amount of Gross Interest, the date received to your account and the Income account should be the relevant Interest received code. When you record the transactions, they will automatically be reconciled for you.
25. What is the difference between Receive Payments & Receive Money?
You enter your sales invoices in the ‘Enter Sales’ screen when you wish to record customer credit sales or cash sales. You can then print an Accounts Receivables list to see which sales invoices are outstanding. You then use ‘Receive Payments’ to apply the receipted monies against the outstanding sales invoices.
Receive Money is for when you bank funds which do not relate to your customer sales. eg. Income Tax refund, GST refund, Capital Introduced, Bank loan advances etc.
26. How do I reconcile my wages in MYOB?
27. How do I record transfers between my bank accounts in MYOB?
Go to your Accounts Command Centre and click into Transfer Money. Choose the Bank accounts that you wish to transfer the money from & to, enter the amount & date of the transfer then Record.
28. How do I reverse a bank reconciliation in MYOB?
Depending on which version of software you have, an 'Undo bank reconciliation' button will show at the bottom of your bank reconciliation screen. If you do not have such button, you would have to restore to a previous backup file. You would need to consider how long ago your last backup was to decide whether it was worth your while restoring, as you would have to re-enter any transactions that have been entered into MYOB since the last backup was done.
29. How do I edit a receive payment transaction after it has been recorded in MYOB?
Depending on what version of software you have, you may have the ability to change the Receipt ID, date, memo & Bank account after a payment transaction has been recorded, but you cannot change the amount. You need to delete the payment and re-enter it for the correct amount. Firstly complete a backup, then locate the actual payment and click into the arrow so that the Receive Payments screen appears. Go up to Edit - Delete Payment. Go back into Receive Payments and apply the correct payment amount to the relevant bills. If the incorrect amount has already been reconciled in the Bank reconciliaton or it was recorded in a previous month or previous financial year, then the incorrect amount should be reversed into the current month instead of being deleted. To reverse transactions, you first need to go to Set-up - Preferences - Tick 'transactions can't be changed'. Your Edit option will now change from Delete payment to Reverse payment.
30. If I set-up a new employee pay code in MYOB Payroll to repay an employer advance in weekly instalments, how do I keep track of the reducing advance balance?
You can set-up an accumulator to keep a track of the reducing balance. There are a few steps to set this up:
Under Payroll, Maintain accumulator – Add new (you may wish to call it ‘employer advance’)
Under Maintain employee – choose the relevant employee – go to the Accumulators tab – click new and choose the one you just created. Enter the opening balance of the advance and tick whether you wish the employee to see the reducing amount on their payslip.
Go into the Post-tax deduction Pay code you have set-up and in the accumulator tab – select the accumulator from the drop down list and click that you wish the balance to decrease. (now every time this pay code is used by the employee, their outstanding balance will reduce)
Normally the accumulator will track to quantities/units, but all you need to do to have it reduce by dollars each time is in the weekly pay, ‘enter pays’ put the dollar amount (eg:100) in the quantity field and put $1 in the rate field (the multiplier) this will reduce the advance by $100, which is visible immediately on the employees payslip.
For any other reports, the balance will only update/reduce when the pay is finalised.
To obtain the current balance at any stage after the pay is finalised, either go into the employees accumulator tab or print the report – Accumulator balance.