Bookkeeping (Overview)

HirePOS Bookkeeping is designed for smaller cash based businesses, and makes it simple and easy for the business operator, yet allows reports and data to be extracted effectively by the accountant.  It is not a full double-entry accounting system with assets, liabilities, equity and balance sheet.  The focus is more on the data entry and bank reconciliation side, ensuring your transactions are entered as accurately as possible with limited accounting knowledge.  These transactions can then be viewed by your account as required.

How to activate Bookkeeping

To activate Bookkeeping mode, you must be a HirePOS Admin user.

  1. From the main menu strip at the top, go to Setup > Preferences > Modules.
  2. Check the Accounting/Bookkeeping option.
  3. Click the Save Changes button to return to the Preferences Menu. You can then click the HP icon at the top left to return to the main screen.

How the Bookkeeping system works

INCOME

The system breaks income into two areas, Sales Income and Other Income.

Sales Income is based on the day to day income you generate from invoices and payments received from customers.  For 'accrual' basis you report on invoice amounts based on the invoice date.  For 'cash' basis you report on payment amount received based on payment date.

Other Income is income that is not received through normal everyday business activities, such as bank interest, government refunds and so on.

EXPENSES

Expenses are broken down into OperationalCapital, and Personal/Drawings.  You need to categorise your expenses as accurately as possible into these three areas.  Your accountant will determine what expenses you are able to claim tax deductions on.  Your job is to categorise and note the reasons for each expense in detail.

Operational Expenses are expenses incurred through normal everyday business activities, e.g. phone, electricity, cost of goods sold, wages and superannuation.

Capital Expenses are expenses paid for equipment that you use for your business, e.g. computers and office equipment, vehicles and machinery.

Personal/Drawings expenses are directors fees and drawings or any expenses for personal use.

The example Income & Expenditure Summary (Cash Basis) below gives an overview of how the bookkeeping system works with income and expenses.

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INCOME

Sales Income (Net of GST)

100,000

Other Income (Net of GST)

10,000

Total Income (Net of GST)

110,000

GST Collected for period

11,000

TOTAL INCOME

121,000

Less

OPERATIONAL EXPENSES (Net of GST)

20,000

GST Paid for period

2,000

Operational Expenses (Inclusive of GST)

22,000

CAPITAL EXPENSES (Net of GST)

10,000

GST Paid for period

1,000

Capital Expenses (Inclusive of GST)

11,000

PERSONAL/DRAWING EXPENSES (Inclusive of GST)

66,000

TOTAL EXPENSES

99,000

Excess income over expenses

22,000

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TRANSFERS

Account Transfers are a special income/expense type used for transferring funds internally between your accounts.  These transactions will show in your Cash Book in the income and expense columns however they are marked as an Account Transfer and are not included in the likes of Income & Expenditure or Expense, Sales, or Payment reports.

OPENING BALANCE

The Opening Balance type is similar to the Account Transfer type, however this is normally used in the first transaction to bring the bank account balance up to the current balance when carrying over from another system.


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