Re: [SL] Incorrect Tax Reports

[Joseph A. M. <ja...@jo...>]

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My two cents - As a CPA in the U.S. I would agree that the cash basis
reporting doesn't work as perhaps it should. Other accounting programs
that cover a similar market, ie. quickbooks allows the user to track
receivables and payables but yet report on a cash basis. While the
consumption tax ( i.e. Sales tax) works differently in New York State
because it is on the accrual basis - It would still have a vary similar
reporting problem for accrual basis taxpayers.  As sql-ledger matures
for the international marketplace hopefully it will factor in local
taxation differences.

It would be nice to know approximately how many accountants, CPAs,
chartered accountants are using the program for their clients. I only
use it for one small non-profit with very little activity as it would
not meet the needs of most of my clients. I look forward to the day that
it could replace our citrix  and quickbooks licenses and save us some
money. Clients that can use SqL ledger would most likely be a size that
would file on the cash basis for U.S. Income Tax purposes. Since in the
U.S. ( and I would guess all over the world ) the General Ledger is the
"bible" in terms of books and records but yet SQL ledger fails in this
key area.

David, while only entering cash transactions might solve your problem it
does create other problems such as not being able to track receivables
and payables. I can't think of another workaround at this time.

Joe

www.joemaffia.com



David J wrote:
> Hello list
> We continue to have significant bother with cash-basis tax
> reports. =

> In Australia, the existing reports are incorrect because
> part-payments are ignored. =

> See example at end.
> Dieter seems not yet convinced that these reports are wrong,
> so I'm interested to know of any other places in the world
> that applies cash-basis tax-reporting the same as we do.
> Hopefully then Dieter may be interested to reconsider the
> problem, and seek a better solution.
> I believe New Zealand is the same.  Can someone confirm ?
> Anywhere else ?
> Thanks
> David J
>
> PS.  If you use Cash Basis tax reporting in Australia, you
> have been warned !!
>
> Example.  Remember its cash basis tax reporting.
> On 15 February we invoiced a customer for $1,000 plus GST of
> $100, total $1,100.
> On 14 March the customer paid $550 towards the invoice. We
> applied the part payment correctly. At the end of March
> there is $550 still owing on the account.
> Under Australian GST rules, we collected GST of $50 from
> this customer during March, and we now owe that to the Tax
> Office.
> But SQL-L incorrectly reports the GST collected as zero,
> until the invoice has been paid in full !
> (If we report zero we could get into serious trouble with
> our Tax Office.)
> The remaining $550 was received in April, and the final $50
> of GST should be reported and paid to the Tax Office
> sometime later. But the SQL-L report for April, Cash Basis,
> now shows $100 of GST collected. The SQL-L report is again
> incorrect.
> Of course this issue applies to both AP and AR partly paid
> invoices.
>
> Reference
> http://www.ato.gov.au/businesses/content.asp?doc=3D/content/71900.htm
>
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