EdgeLink Accounting Transfer Utility For Simply Accounting

Transcription

1 EdgeLink Accounting Transfer Utility For Simply Accounting Copyright Edge Management Systems Inc The EdgeLink Accounting Transfer Utility is an optional add-on module available within the Edge Management Software Program. This program will take the information that is entered into the Edge program on a day to day basis and convert that information into a format to be imported to a 3rd party Accounting Program The sole purpose of Edgelink is to simplify the Accounting procedures necessary for all small businesses. By providing this tool you can save countless hours of double entering information or save the expense of bookkeepers or accountants salaries to do this for you This document pertains to the functionality of Edgelink with ACCPAC Simply Accounting. Intuit Quickbooks functionality will be added very early in 2007 and a separate document will be made available for that accounting system How it Works 1.You or your accountant will have to review your Simply Accounting setup and your Edge program so that all of the necessary accounts for posting are in place. 2.Once the accounts are set up, you select Edgelink export to create the journal entry file. 3.Then you enter the Simply Program and Import the file that was created to post the journal entries. Edgelink creates the journal entries as an Export file Journal entries file Simply Imports the journal entry file and make the accounting entries

2 Warranty and Support Edge Management Systems Inc. makes no representations or warranties as to the suitability of the Edgelink module as it applies to your specific accounting procedures. EMSI only warranties the program to perform those functions as outlined in this documentation. EMSI will support the functionality of the Edgelink module and any questions pertaining to its functions can be directed the EDGE offices. NOTE: EMSI WILL NOT supports the functions of each independent accounting software package. Support questions concerning accounting procedures should be directed to your accountant or directly to the authors of the accounting program. Accounting Basics An easy to use and logical system was developed over time, which is used to record any changes to accounting systems. The system involves using the words DEBIT and CREDIT. The accounting program that you use should explain the difference and how each applies to the EdgeLink data that is produced. The example given will relate to debits and credits as well as showing how each of the account s balance is affected with a (+) or (-). Entering a positive amount will increase the specified account balance, while entering a negative amount will decrease the account balance. Therefore, positive amounts will Debit Asset and Expense accounts and Credit Liability, Equity, and Revenue accounts. Similarly, negative amounts will Credit Asset and Expense accounts, and will Debit Liability and Revenue accounts. Summary of debit and credit theory: ASSET & EXPENSE ACCOUNTS Debit to increase (+) Credit to decrease (-) LIABILITY & INCOME ACCOUNTS Debit to decrease (-) Credit to increase (+) 2

3 Terminology This section will explain some of the terminology used in this document. Account Asset Balance Sheet Credit Debit Expense Export File Import Income Statement Liabilities Default This is an accounting term for a section set up by the user to keep track of a certain grouping of expenses. IE: Income, Assets, and Liabilities All physical things and other items of value owned by the company. Assets include inventory, land, buildings, cash or money that is owed to the company. A summary of what a company owns or owes on a particular day. This is an accounting term used to increase or decrease the balance or total of an account. This is an accounting term used to increase or decrease the balance or total of an account. This is the series of accounts that track any money spent on the operations of the business to provide goods or services to its customers or to carry on business, excepting amounts to acquire assets. This refers to taking certain information from a software program and placing it in a file format that is readable by another program. This is a series of information that is created by the host program in a certain structure or layout This is a procedure to bring information into a program that is easily read and linked to the way that program handles information. A report that displays Revenues and Expenses for a particular period. All the debts and money owed to others by the company. Liabilities may include loans from the bank, money owed to the government, employees or suppliers. Some information is entered frequently, so it is convenient to enter a pre-assigned value, which is called default. 3

4 Plan to Implement You will want to ensure that the implementation of Edgelink is successful and will not lead to problems or issues once in place. This can be done by following a few setup guidelines and rules. Date Consideration Edgelink was released on January as a part of a regular Edge program update. Numerous changes were made in the program to facilitate the data input and proper capture of the necessary information to provide the proper accounting information transfer. You should be aware of this as you plan your first transfer. If you are a current Edge user and received it as an update you will want to ensure you do not export any information prior to the installation of version That is to say if you downloaded and installed the update on January 10th 2007 your first import should be from January 11th and forward. Importing prior data will definitely be a problem. New clients after January 1st, 2007 need not be concerned with this date issue. Synchronizing Information in both programs You want to ensure the information in your Edge Program and the Information in your Simply Program are synchronized. They should both report the same figures prior to any exports. This includes Accounts Receivable This includes the amount owed to you by Client - Charged on Accounts, 3rd party billing accounts, any outstanding staff purchases advanced to payroll or any payroll advances at the time of implementation. Reports Accounts Receivables AR Summary All clients Reports Accounts Receivables 3rd Party Summary All 3rd Parties If your implementation date is within a pay period you will want to review Employee Advances and Staff purchase advances and ensure the outstanding amounts are included in your accounts receivable figure. These will be cleared off on the next payroll run Review the advances under the Employee tab Advance Tab and ensure the total of all displayed outstanding advances are included. To determine outstanding purchases Print the Employee Staff Purchase report for the day after your last completed payroll to the current date. The total of the Items with ADV as the pay type should be added to the total of the previous 3 items Accounts Payable Produce the report Reports / Accounts Payables / Detailed Payables / All Suppliers in the EDGE program. This will give a listing of all outstanding invoices for all vendors. Check the accuracy of this information. If any invoices have been paid you must remove these using Inventory / Pay Suppliers. ENSURE the date entered for the payment preceeds the first date to be imported because you do not want this payment information to be exported to the accounting system. The user may select all paid invoices and enter a fictitious cheque number to clear them. If there are invoices that have not been entered into Payables you must add these. It may be convenient to use the MISC option to make a one-line entry of the outstanding invoice total in Inventory / Orders / Receive Blank Order portion of the EDGE program. 4

5 Once the Payables are correct, reproduce the Detailed Payables Report, as this is necessary when entering the amount for the Accounts Payable portion of the accounting system Gift Certificates Liability The Edgelink design of Gift certificates handling as a liability (or deferred income) is based on Canadian and US Statutory Considerations and Abandoned and Unclaimed property laws as outlined in the Price Waterhouse Coopers white paper. Revenue should not recognized for the prepayment for a gift certificate or gift card until the gift card is redeemed for merchandise. The liability (deferred income) for the payment received should be settled as current since the obligation must be settled on demand. Paragrah 16 of Accounting Standards Board statement 140, accounting for transfers and servicing of financial assets and extinguishing of liabilities ( FAS 140) concludes that a liability should be de-recognized when the obligor has been legally released from it s obligation. Applying the guidance of FAS 140 a gift certificate (card) should not be reversed into income until it is redeemed or legally extinguished. Statutory Considerations and Abandoned and Unclaimed Property Laws - Some companies issue gift cards with stated expiration dates. Certain States and Provinces and most courts do not recognize expiration dates on gift cards and provide the customer a legal right to redeem an otherwise expired gift card at any time. Whether or not a gift card has an expiration date, the treatment of unclaimed gift cards may fall under the abandoned and unclaimed property ( AUP ) laws. Please consult a lawyer or an accountant before clearing off old gift card sales as to when you should convert the liability to income and pay the respective taxes. To determine the gift card liability in your system, review the list of certificates by clicking the client tab and then the gift certificate administration icon. The total of your outstanding certificates is displayed in the lower left corner as shown in the following example. Receiver General Payables You must ensure the balance owing to the Receiver general reflects the true balance owing at the time of initialization in both systems. Go to Employees Tab Pay Government remittances and ensure all paid entries are marked as paid in your Edge System. Ensure that the totals outstanding at initialization are correct. If there are any adjustments to be made, you must do these before initialization using a balancing entry on a date PRIOR to implementation. 5

6 Preparing your Simply software You must determine WHEN to implement the system and start placing information into it. The information that you are transferring to a computer accounting system must be current up to and included in the system installation date. This may require the assistance of your Accountant. You will need an INCOME STATEMENT and BALANCE STATEMENT. Let s say for example, that your accounting year is from April 1st of one year until May 31st of the following year. You might decide to implement the computerized accounting system on June 30th. If this is the case, you should gather all the totals for each ledger account from April 1st up to and including June 30th, and place these opening balances in your accounting package set up. You MUST have an up to date listing of your chart of accounts. The required fields are described in the Edit portion of this manual. Simply Linked Accounts A decision must be made whether you will use all or only part of the EdgeLink capabilities. If your Simply system is using linked accounts you will experience problems with the Export. These accounts can be modified by choosing Setup Linked Accounts. as shown in the illustration to the right here Payroll If you will be using the EDGE payroll to export to your Simply program, you must remove all of the linked accounts in Simply. In the Simply program, go to Setup Linked Accounts Payroll and remove all the account numbers. This must be done under all 3 tabs. To remove an account, click in the field and press the delete button. All fields must be blank to successfully import Edge payroll entries. 6

7 Payables If you execute all of your Payables throughout the EDGE, you must remove the account number from Setup Linked Accounts Payables in the Simply program. Another alternative would be to assign an account number for EDGE liabilities. This would allow you to place your EDGE related Payables in this account and continue to use the Simply Payables for other suppliers. If this is the case, leave the entries in the example below in place. Receivables If your simply system is set up with linked accounts for receivables, you will no be able to post Edge client charge on accounts, 3 rd party charge on accounts or Staff purchases that are advanced to payroll. The following example has the accounts removed. 7

8 Preparing your Edge Program You must ensure that all the information in the EDGE system is current and correct. THIS IS VERY IMPORTANT. You must ensure that the information is complete and correct prior to exporting the information to your accounting system. The Pay types and suppliers information should be reviewed just prior to the Implementation Date. Pay Types If you are using an Autodebit machine, which automatically deposits the funds in your bank accounts electronically, you want to ensure this is set up properly in your EDGE program. To review this, go to System Codes/ Payment Codes. In this example, the Visa payments is going to Autodebit 1 or Bank Account #1 and the debit card payments are marked as Autodebit 3 and are assigned to Bank account #3. The Master- Card is deposited into bank account #2. You will need to note these, as they will be required to be set up in the EdgeLink. Suppliers A VERY IMPORTANT FIELD in the supplier file in the EDGE program must be reviewed. The ACCOUNTING CODE should be filled out for any suppliers who do not sell you the items listed in your inventory. For example, if you are using suppliers files to track your telephone bills, the user must enter the expense account in the accounting system to apply the invoices. For this example and using the example accounts listed on your Expense chart of accounts, the Sample Expense accounts list the accounting code for the Telephone Supplier would be #5750 Telephone. 8

9 Edgelink Menu The Edgelink Menu is available off the File Dropdown. The main menu is displayed as follows: Edgelink Accounts Report This option will produce a report of all the Asset, Liabilities, Revenue and Expense accounts as well as the accounting code assigned to each supplier. EdgeLink Options Default Path This is the target drive and directory of where you want the Edgelink files stored on the computer. You may want to create a directory solely for the purpose of storing the Edgelink files and nothing else. Rather than having the files created in your accounting system directory. If you do want to do this, create the directory accounting (or whatever you want to call it) prior to entering the default path. Once the export has been performed, the tile that is created will be sent to that drive, directory, and subdirectory. You must remember that you will need to remember the drive and directory to import the file into your accounting system. 9

10 Default Length The next 3 fields allow you to set up a default number of day s to contain in your export files. If you want the files to each contain a week worth of information, enter the default as 7. The program will then take the last date of the previous export and add 1 day as the starting date and 7 days as the ending date. Accounting Package This is the area of the program, which sets up the export files format. Each accounting package requires slightly different file requirements. To select another package use the up or down arrows to move the block to the appropriate package and then press ENTER on the OK button. Configure Accounts By selecting the Configure Accounts button, you are allowed to enter the chart of accounts that you have established in your accounting system. If any of the accounts do not exist in your accounting system they will have to be created before an import into that accounting system can be used. Each system allows the used to define account numbers and descriptions. 10

11 Asset Accounts These accounts must be established in the Asset Accounts Retail, Professional, Color, Inventory Register (Holding Account) Bank Account (Payroll) Bank Account (Payable) Autodebit Bank #1 Autodebit Bank #2 Autodebit Bank #3 Accounts Receivable Cash Disbursements These accounts are used to record the value of the inventory that you receive from your suppliers and are affected by receiving invoices in the Edge program. This account is used as a temporary holding area for all the pay types that are not assigned to a bank such as cash or cheques recorded on a day to day basis. It is only used to hold the balance of transactions until the user make a deposit from this account into the bank. This is the number of the bank account that you use to make the payroll and the government remittance cheques from This is the bank account that you use to pay cheques out to suppliers. These accounts are the bank accounts to post the transactions that occur using an Autodebit pay type. (See setting up the Edge program). In the example there, we showed the visa and debit card going to bank account #1 and MasterCard going to bank account #2. You must identify the account # s in these blanks. This is an asset account, which tracks the amounts of advances that have been given to the employees, which is recovered when subsequent payrolls are performed. Or the amount owing from the clients who are allowed to charge on account This is a temporary area that maintains petty cash payouts until they are assigned to their appropriate expense accounts. 11

12 Liability Accounts Gift Certificates EI, CPP, & Income Tax Payable Vacation Payable Accounts Payable GST Paid GST Received PST Payable RRSP Payable Deduction 1-3 Tips Payable This account is the total amount in outstanding gift certificates to be redeemed by your clients. These accounts track the amount that the business must submit to the Receiver General. They include both the Employers and Employees contribution. This is the account that tracks what is owed by the Employer to all Employee s for vacation pay. As it is accumulated, this amount increases or decreases as it is paid out. This account is a total of ALL accounts that are payable to your suppliers. This account tracks all GST that has been recorded when you enter an invoice in the system or make a petty cash pay out where you have entered GST in the total. This account track all GST that has been recorded when you enter sales in the system or make a petty cash pay out where you have entered GST in the total. This account track the Provincial Sales Tax collected from clients or employees for products purchased. These accounts are the amounts of deductions, which have been withheld from the employee as established in the employee information portion of the Edge program. This is the outstanding amount owed to employees in tips collected. This account is adjusted by payroll entries or by petty cash disbursements adjustments 12

13 Revenue Accounts Service Income Service Refunds Retail Income Retail Refunds Shop Supplies Income Shop Supplies Refunds These accounts will track all services based on the service codes used to set up your services in the EDGE If any refunds are given for services rendered, the totals will be accumulated in this account. This account will accumulate all income generated for retail sales. If retail purchases are refunded, the accumulated total will be displayed in this account. This account will accumulate all shop supplies income generated for sales. This is common in the case of contract or chair rental employees purchasing shop supplies for their own use. If shop supply item is refunded, the accumulated total will be displayed in this account. 13

14 Expense Accounts Wages Service, Technical, Retail Commissions Vacation Pay Stat Pay and Bonus PST Expenses Delivery Expenses EI, CPP, Expenses This account accumulates the wages that are paid out to employees paid on a salary or hourly rate. The totals of all commissions paid on each level. This is the total of all vacation pay the business contributes to employees. These accounts track the additional payroll costs administered by Edge payroll. This account tracks the amount of Provincial Sales Tax the business paid on purchases. This account tracks the expenses for delivery charges from your suppliers These accounts monitor the amount the business had to contribute to Revenue Canada for Source Deductions. 14

15 Edgelink Export Destination Path The file to be created is shown here. The defaulted filename will be Destination path\elexport(date).txt, where (date) is the date of the computer clock. You do have the option to change any aspect of the destination prior to exporting Export Options The export function takes the information that you select for the date range that you select, and creates journal entries for the accounting package that you selected in set up. There are the three areas of the Edge program, which can be exported. You can select any or all of these areas. The area that you have selected now has to be given a date range to export. Only the areas selected can be changed. The start date will be the date of the last time the area or component was exported + 1 day. This is to prevent duplication of entries. I can be edited in the case of you deleting or misplacing a previous export. The reason you are given choices for the components to export is that usually your Income and Payroll will be 100% current and up to date, you may not have had the opportunity to completely enter invoices or payment to suppliers. This way you can skip that portion of the export until you have caught up. Export This will create the file and confirms if successful once completed. 15

16 Importing into Simply To import the information into Simply that was created in Edge, open Simply and select File Import General Journal Entries As mentioned earlier in this document, Simply will look in the directory that the program data is stored so creating a folder in that directory will require less navigation to retrieve the file. Once the file has been selected you will see the following screen indicating the import was successful 16

17 Export File Details Income Export details When exporting income information, EdgeLink sets up a different journal entry for each day within the period to provide you with more detailed reporting from your accounting system. For example, if the date range you select is for 6 day working period, 6 separate journal entries will be created as shown in the following examples. Sales For each day within the period, any or all of the following account balances will change: Income Accounts Service Income Service refunds (Negative balance) Retail Income Retail refunds (Negative balance) Liabilities Accounts PST Payable GST Collected Gift Certificates Liabilities Tips Payables Asset Accounts Register Holding Any Bank Account Accounts receivables 1 2 (1) The asset accounts credited will be a combination of the bank accounts that you have set up and the Register holding account. We cannot assume that you have made a deposit for anything received in the way of Cash or Cheques. In this example will be posted to your bank account. This would be Debit cards, Visas, Master- Card s etc. The is posted to the holding account until such time as you make a physical deposit to you bank account. At that time you would Debit the bank for the amount deposited and credit the register holding account reducing it by the same amount of your deposit. (2) The sale of a gift certificate is not considered income. It is therefore a company liability until such time as it is redeemed. If a gift certificate is sold for $100 the entry for that day in your accounting system would be to Debit (increase) your bank account and Credit (increase) your liability account. If a gift certificate is redeemed for $100 the entry would be to increase revenue account for service or retail and the offsetting entry would be to decrease the gift 17

18 certificate liability account. In the previous example $39.20 is Credit posted which would indicate that the amount of certificates sold versus the certificates redeemed that day was higher by $ Staff Purchases If an employee has made a Staff Purchase, but not paid for the product, the amount has been considered an advance. The income file will make the following entries.: Petty Cash Entries If you have made any payouts using the Open Cash Drawer of the EDGE system, the following entries will be made. Increase Asset Account Cash Disbursements (minus GST if entered) Increase Liability Account GST paid Decrease Asset Account Register Holding The cash disbursements account would have to be adjusted regularly to clear the entries out the proper expense accounts. In the example above, lets assume it was an entry to pay a delivery person for coffee received. At some point in time you would make an offsetting entry crediting 105 Cash Disbursements for $100 and Debiting the Expense account for client amenities for the same amount. This would also be the case if you were paying out tips using the open cash drawer function. 18

19 Charge on Accounts Any transactions where the pay types are charge on Account or Billed to a 3 rd Party will make the following entries Increase Asset Account Accounts Receivables Increase Income Accounts Service or Retail Accounts Increase Liabilities Accounts GST Payable PST Payable Payments on Accounts Any transactions where a client or a 3 rd party has made a payment on account would alter the following account Increase the Asset Account Either the register holdings or the Bank Account Decrease the Asset Account Accounts Receivables 19

20 Payable Export Details All the journal entries made are generated through the Receive Inventory function and the Pay Suppliers functions in the Edge Program. For each invoice that is entered in Receive Inventory, the EdgeLink program will look at each line of the invoice to determine which account to assign the item to. The total of each invoice will be assigned as a payable. The invoice will: Increase Liability Accounts Accounts Payable PST paid GST paid Edgelink will analyze each item in the invoice and adjust the following accounts. Increase the Asset account Retail inventory Professional inventory Color inventory If the invoice contains a delivery or freight charge this will: Increase the Expense account Delivery charges If you use the MISC code to enter a single line to input an invoice from a supplier for whom you do not have any items established in your inventory database, such as a telephone or utility bill, the EdgeLink program will look at the supplier file to determine which expense account you would like to apply all invoices from this supplier to, and: Increase the (applicable) Expense Account In the example above, It posts an entry with Gold Invoice as the description using the supplier code rather than description (Simply has limitations and will not allow a large description) followed by the invoice number (027). There were no delivery charges on this invoice. There was an entry for a MISC item in the invoice. In the supplier setup file we have entered the account for promotions as the expense account for any Miscellaneous items we receive from this supplier so it posts an expense to Advertising and Promotions for $21 20

21 Paying Suppliers Additional journal entries are made when you pay suppliers in the EDGE program, the entry will: Decrease Asset account Bank account (Payable) Decrease Liability account Accounts payable Payroll Export Details The EdgeLink program export file for payroll as determined by the Edge set up will Increase Expense accounts Service commissions Technical commissions Retail commissions Staff wages Increase Liability accounts EI payable Cpp payable Taxes payable RRSP payable Deduction 1 payable Deduction 2 payable Deduction 3 payable Vacation payable (if not paid) Decrease Liability Account Tips Payable ( if linked to payroll) Increase Expense accounts for the employer s portion of the following: UIC expenses CPP expenses Vacation pay (when paid out) Stat Holiday pay Bonus pay Decrease Asset Account Bank Account (payroll) 21

22 Advances If you have given out an advance in-between pay periods a separate entry will be made posting that advance to accounts receivables. Government Remittance Entries When you use the EDGE program to pay the Receiver General for payroll deductions, the export file will: Decrease the Asset Account Bank Account Payroll Decrease the Liabilities accounts EI payable CPP payable Tax payable 22

23 User Duties (after import): Deposit Adjustments Produce a deposit, which will make the necessary adjustments for actual deposits made to the bank. All income is credited to the Register holding account, so in order to provide the audit trail to the bank you would: Credit (decrease) register holding account Debit (increase) bank account Overages/Shortages There may be periods when all deposits have been made and the Register Holding account may have a positive or negative balance. This is due to overages or shortages in the cash. To balance the Register holding account, you will have to make a manual journal entry, which would: Debit (increase) the Register Holding Account Credit (decrease) the overage/shortage Expense account Or Credit (decrease) the Register Holding Account Debit (increase) the overage/shortage Expense Account Petty Cash Adjustments Periodically you will have to reconcile all the entries in the EDGE program, which will effect the petty cash using the OPEN CASH DRAWER function. To do this, produce a Petty Cash Report. The Petty Cash amounts minus any GST have been assigned to the asset account Cash Disbursements. You must determine where or to which Expense accounts these balances must be assigned. To do this you must: Credit (decrease) cash disbursements Debit (increase) appropriate expense account For example: If you have used open cash drawer to pay for envelopes and entered $5.00 and GST of $0.30 the entry would be: Credit cash disbursements - $5.00 Debit office expenses - $5.00 Note: The $0.30 has already been assigned to the GST paid Liability Account, therefore this total is NOT included in the adjustment. Inventory Value Adjustments When inventory is received from suppliers in your Inventory database, the value of the inventory is assigned to the respective inventory asset account. These accounts will grow and grow because they do not take into consideration the usage of these products. Remember all three asset accounts must be adjusted periodically To balance these figures, the user must take a physical count on a predetermined basis. Once you have made the necessary adjustments to the quantity on hand, you should run an Inventory Value Report to provide you with the proper amounts of inventory value for the adjustment. Then make a manual journal entry to balance the values. Credit (decrease) Retail Inventory Asset account Debit (increase) Retail Expense account 23

24 For example: let s say you have a figure of $10,000 in the retail Inventory Asset account. When you take stock and determine the inventory has a value of 7,000, the difference is $ , which becomes the amount of the adjustment. Credit Retail Inventory Asset account - $ Debit Retail Expense account - $ Retail used In store To make an adjustment for the retail, which has been used in the service area, produce a Retail used in Salon report to make the adjustments. If, for the period specified, the value is $100.00, the adjustment would be made in the following manner. REMEMBER, the accounts to be altered are the expense accounts. Debit (increase) Professional Expenses Credit (decrease) Retail Expenses Payroll Deductions Adjustment If you take the deductions from the employees such as RRSP s, you must make an adjustment when these funds are transferred. RRSP totals will increase the RRSP liability account. If you make a cheque payable on behalf of the employee to a financial institution, you would make the following journal entry: Credit (decrease) Bank account Debit (decrease) RRSP Payable Liability account If you are taking deductions from the employee for a portion of a deduction such as a health car / dental plan etc., you must ensure that there is an expense account for the business portion of the plan. Let s say for example, that you deducted $50.00 from the employee and the business contributes $25. When paying the supplier of the plan, the entry would be made as described in the following example: Credit (decrease) Bank Account Debit (decrease) the appropriate Deduction Liability account Debit (increase) user defined expense account If the deduction is going toward an expense such as a coffee fund, then you would make a similar journal entry which would adjust an expense account. For example, if you deduct an amount equal to $ from the employees to reduce the expenditures for coffee, the entry would not affect an asset account because no money is being paid out. The entry would be: Debit (decrease) Deduction #1 liability account - $ Credit (decrease) Expense account (coffee) - $