Income and Expenditure Accounts
Each financial transaction has an Income & Expenditure Account recorded against it so they can be categorised for accounting purposes. Many accounting systems refer to these categories as the Chart of Accounts.
HirePOS already has some Income & Expenditure Accounts setup to save you some data entry time, but these accounts should be reviewed with your accountant, and any adjustments made as necessary.
You do not need to setup an account for Sales Income.
Any payment received through Bookings and Invoices is classed as Sales Income. Individual sales income details are broken down by Item Type and Item Category.
Each Income & Expenditure Account will also fall into one of the following categories:
- Operational Expense
- Capital Expense
- Sales Income
- Other Income.
There are also two special categories used by the system: Opening Balance and Account Transfer. Transactions recorded against accounts of this type are transfers between your business accounts and are not actual income or expenses to the business.
A default tax code can also be nominated against each Income & Expenditure Account.
How to set up Income and Expenditure Accounts
- Navigate to Setup > Income & Expenditure Accounts. This opens the Income & Expenditure Accounts List, which lists any accounts already added.
- Click New Account to open the Income & Expenditure Accounts window.
- Enter the Account Name.
- Nominate a default tax code from the Tax Default drop-down list.The tax code can always be overwritten when you enter a new expense or receive a payment.
- For taxation purposes, you need to select whether the account is an Operational Expense, Capital Expense, Personal/Drawings or Other Income, or whether it is an Opening Balance or Account Transfer.
- Click Save Changes when completed.