Account Types
There is an option to specify an Account Type which appears next to the Account Name as per the example below;
The Account Type depends on how the file has been structured. The different Account Types are referred to below;
What is a Capacity Building Account?
The Capacity Planning features allows you to project the income earning potential of your employees based on their Capacity. You can then compare the capacity with the projected income. This is referred to as Capacity (based on employees) v Demand (based on clients)
To do this comparison, you need to specify which account/(s) in the Profit and Loss is a Capacity Building account. This will allow you to assess the Capacity using various functions including;
- Employee Capacity; The Employee Capacity show the projected annual capacity by employee and compares with the Projected Income per the Profit and Loss (based on the Capacity Building Accounts). In the example below, the projected income is $1,739,990 and the organisation is projected to have excess capacity of $17,108.
2. Capacity v Demand; This is a more detailed month to month calculation that is based on the Capacity Drivers. It compares the Projected Income (based on the capacity building accounts) with the projected Capacity (based on the Capacity Drivers)
What is an Inter-Entity Account?
If there are multiple divisions within a file, you may want to exclude various accounts from the consolidated/group report. Eg, Division A pays a Service Fee to Division B.
If you have setup Divisions, you will see an "Inter-Entity" option against every profit and loss account.
What is an Inter-Group Account?
If there are multiple files within a group, you may want to exclude various accounts from the consolidated/group report. Eg organisation A pays a service fee to organisation B.
If you have setup groups for consolidated reporting, you will see an "Inter-Group" option against every profit & loss account.
Why do I need to specify Retained Earnings?
If you are using the Balance Sheet, you need to specify the "retained earnings" account so that Magnifi knows where to allocate the Profit. The projected profit is allocated to the Retained Earnings account to ensure the Projections balance.
How do I allocate Income Tax Expense?
The Income Tax Expense appears as an Account Category.
You allocate Income Tax Expense if you want to report this on the Profit and Loss Projection.
How do I allocate Dividends?
The Dividends appears as an Account Category.
You allocate Dividends if you want to report this on the Profit and Loss Projection.
How do I specify the GST & PAYGW accounts?
Your accounting software will include GST & PAYGW liability accounts. To project the cashflow, you need to specify these accounts in Magnifi.
Magnifi will allocate the GST payable (based on accounts subject to GST) to the GST liability account and the payments will be allocated depending on the payment terms.
Magnifi will deduct the PAYGW tax from the Gross Wages based on the rate specified under Payroll Rates and allocate this to the PAYGW liability account. Payments will then be deducted depending on the payment terms.