Accounting Behind Saasu

When Saasu creates transactions, there are often lots of postings to the ledger that occur automatically behind the scenes. This help section explains the process for some of these.


Opening Balances

Adding Stock to Saasu

When you add stock value and quantity into the Inventory Opening Balances screen Saasu doesn't load value into the balance sheet account as this is done when you add an opening balance for all stock value into the Opening Balances screen. Essentially these two things occur:

1. In the Account Opening Balance screen:

Account Debit Credit Tax Code
Asset: Stock 100.00
Equity: Historical Balance 100.00

2. In the Inventory Opening Balances screen:

Account Debit Credit Tax Code
Asset: Stock   100.00  
Asset: Stock 100.00  

Invoices (Sales) and Expenses (Purchases)

Sales Orders

Saasu doesn't post any financial entries to the ledger on orders where no payment is received. Saasu posts financial entries to the ledger on Sales Orders (goods/services haven't been supplied) where payment has been received but the transaction hasn't moved to Sales Invoice stage (goods/services have been supplied). Saasu creates the following journal behind the scenes:

Account Debit Credit Tax Code
Liability: Deposits Received   100.00  
Asset: Bank Account 100.00  

When you convert a Sales Order to a Sales Invoice we move the money from the Liability: Deposit Received account to the Income account. We call this as a Sales Deposit Transfer (SDT). It's a transaction that we do automatically behind the scenes.

Account Debit Credit Tax Code
Liability: Deposits Received 100.00  
Income: General Sales 100.00 

Purchase Orders

Saasu doesn't post any financial entries to the ledger on orders where no payment is received. Saasu posts financial entries to the ledger on Purchase Orders (goods/services haven't been received) where payment has been made but the transaction hasn't been move to Purchase Invoice stage (goods/services have been received). Saasu creates the following journal behind the scenes:

Account Debit Credit Tax Code
Asset: Deposits Received 100.00  
Asset: Bank Account 100.00 

When you convert a Sales Order to a Sales Invoice we move the money from the Liability: Deposit Received account to the Income account. We call this as a Sales Deposit Transfer (SDT). It's a transaction that we do automatically behind the scenes.

Account Debit Credit Tax Code
Asset: Deposits Paid 100.00  
Cost of Sales: Goods 100.00  

Consumption/Sales Tax

When you assign a GST, VAT or Sales tax code to an item in Saasu, a journal occurs automatically behind the scenes to post amounts to tax payable and tax receivable accounts.

NOTE: Saasu does not do this for income tax This is for consumption and sales tax only. Example: 15% GST on a New Zealand domestic sales transaction.

Account Debit Credit
Asset: Accounts Receivable 100.00  
Income: General Sales   90.00
Liability: Tax collected on Sales   10.00

Current Earnings

Saasu posts your earnings from your P&L to the inbuilt account called Equity: Current Earnings automatically. It is the balancing item for the Balance sheet and is a "calculated inbuilt account" rather than a " posting account". Without this balancing account your P&L result would never impact the equity value of a business in the balance sheet.

Payroll

A person earning $1,000 per week from which some tax is removed that is payable to the Australian Taxation Office (PAYG Withholdings). This is done via a Business Activity Statement. 9.5% SGC Super is also calculated that becomes payable to the employee's superannuation fund. We have used a fairly commonly used ATO tax calculation called Scale 7: With Tax Free Threshold and No Leave Loading. Saasu creates the following entries when you enter this payroll transaction:

Employment Expense

Account Debit Credit Tax Code
Asset: Business Bank Account   803.00  
Expense: Employee Base Pay 1000.00   W1
Expense: Employee PAYG   197.00 W1, W2

PAYG Payable

Account Debit Credit Tax Code
Expense: Employee PAYG 197.00   W1
Liability: Employee PAYG Payable   197.00  

Super Payable

Account Debit Credit Tax Code
Expense: Employee SGC Super 95.00    
Liability: Employee SGC Super Payable   95.00  

How it Looks in Reports

Profit and Loss

Account  
Expense: Employee Base Pay 1,000.00
Expense: Employee SGC Super 95.00

Balance Sheet

Account  
Liability: Employee PAYG Payable 197.00
Liability: Employee SGC Super Payable 95.00

Business Activity Statement

Tax Code  
W1 1,000.00
W2 197.00

What don't I see any tax in my expense accounts?

Saasu's Australian Payroll module treats PAYG tax as something withheld as a Liability rather than being an Expense. Pre-tax pay is booked as an Expense through the Base Pay Hourly/Salary component or another component where you have other types of wages and salary components.