How to add Accounts Receivable and Accounts Payable accounts in Magnifi

Receivable & Payable Accounts

How are Receivables & Payables calculated? 

There are 3 Steps involved to setup the projections for Receivables or Payables. The first 2 steps apply to ALL Payables and Receivable Accounts;
Step 1; Under Chart of Accounts, select the Balance Sheet account and specify the Account Category as either Payables or Receivables.
Step 2; After you specify the Payables or Receivables account, an option will appear to specify the Bank Account. This represents the account where the funds will be receipted or paid.

The final Step is entering the collection & payment terms which will differ depending on the type of the account;
  1. If the account IS NOT an automatic calculation (GST, PAYGW, Superannuation or Payroll Tax),  you enter the Terms against the Profit and Loss accounts that have been linked to the Payables or Receivables account under Chart of Accounts.
  2. If the account IS an automatic calculation, you enter the Terms against the Payment Terms option that appears under Cashflow.  The 'Terms' option will still appear in the Chart of Accounts and you can simply select "Mthly/Qtrly".

How is GST & PAYGW calculated?

After you follow the above mentioned steps, there are 2 additional steps involved to complete the setup for the GST & PAYGW accounts;

1.  Under the Balance Sheet tab (in Chart of Accounts), specify which account is the GST & PAYGW account. 
2. Enter the PAYGW % under Payroll Rates. This is the estimated PAYGW % which you can calculate by dividing last years PAYGW tax by the total gross wages. 

How are the Receivables & Payables reported in the Balance Sheet?

The Balance Sheet will report a breakdown of the calculation as per the following example;




Any Profit and Loss account that has been linked to the Balance Sheet account will show under the P/L link and the Payments will also show separately. In the example above, Product Income shows a value of $7,484 which shows a Payment in the subsequent month for the same value. This is because the Terms were entered as 30 days, meaning the payment will occur in the subsequent month. The payment will also appear against the designated bank account (as per Step 2 from above)

Are Receivables & Payables re-forecasted based on Actual Results?

Yes, all of the Receivables & Payable accounts will be re-forecasted based on the actual results. For example, if actual results are showing to December and the actual income was $100,000 with 30 day Terms, then the Receivables budget for January will be adjusted to show the projected payment of $100,000 with the corresponding entry against the bank account. GST will also be updated.

Can you manually update the projected Receivables or Payables accounts?

Yes, you can make a manual adjustment by adding a Worksheet item.