I guess Friday afternoon is a bad day to post a question! Does anyone have any suggestions? I've been playing around with it some more, and I feel like I'm close, but I just can't get it to balance. I want the HST Owing to equal our refund on the balance sheet, correct?

Sarah B said:

I want the HST Owing to equal our refund on the balance sheet, correct?

Normally if you want the balance sheet to show what is owing, you really have to do nothing.  By default that is what it does.  There is no need to post journal entries of any kind to make that happen.

There is a bit of an explanation in this thread.  Hopefully it will help.

If you are setting up the entry to show it owing in Accounts Receivable and want to receive the money when refunded in Receipts, then the entry you indicated is not correct.  You only need to work with 2370 and 2375.  The resulting entry in the sales module will post the difference to Accounts Receivable and you will see the amount on the Customer Aged Reports.

However, I am still not exactly sure what you are trying to do.  Are you attempting to post amounts that were not posted as part of your historical setup of the file?  If so, are you still in History Mode?  If you are, then you can use the Setup Guide to alter your opening balances properly.

If you are not in History mode, then you need to post a journal entry to get your opening balances correct.  However, the one you indicated in your first post of this thread makes no sense without some dollar context.  For example if you take your entry and post to 2370 $100 as a debit and then do the same thing as a credit as your entry indicates, you end up with a zero balance difference in the account.

Not only that but your entry indicates you are getting the refund as soon as you do the entry, which will probably not be the case.  So I would not post it to the bank.

So if you could explain exactly what you are trying to accomplish, we may be able to help.  You don't have to use real numbers just the concept like

"I originally thought my HST paid was $1000 but it was really $1400 so I did not account for $400.  How do I get the $400 to show as a negative in the 2375 account when I am no longer in history mode"

Thanks for your help. I'll give more details.

As I mentioned, we started using Sage 50 at the start of our fiscal year in Oct. I didn't go back and enter historical information. I just entered the starting bank balance including any outstanding cheques. I am not still in history mode, so I believe that I do need to do a journal entry (entries) to correct the opening balance of my HST accounts.

When I calculated the year end HST in Dec., I discovered that we had overpaid our HST installments by around $2,000. There was an additional approximately $1,000 owing to us from ITCs from Oct-Dec. The $1,000 shows up correctly on the balance sheet. We ended up with a refund of around $3000. When we received the refund in February, I entered the Receiver General as a customer and posted the total HST received (2370) as a negative (let's say it was -$1,000), and the HST paid (2375) as a positive (let's say it was $4,000) which left the $3,000 we were owed going in to our bank account. The problem is the $2,000 shows up in our balance statement still , and it also doesn't clear out the amounts on the balance sheet for 2370 or 2375 since the amounts I entered are for the the whole year, and the balance sheet just shows Oct-Dec.

Does this help explain?

It sounds like you had an existing business prior to Oct1/12 and started using Sage 50 on Oct1/12. At that point you should have had a trial balance as of Sep30/12 from the previous accounting program. This would be after the year-end adjusting entries from the accountant were posted. In Sage 50 you would have entered in historical mode those numbers into each G/L account as per the trial balance. However it sounds like all you entered was just the bank account balance but not any other balances - is that correct?.

Yes, that is correct. There was an existing business prior to our using Sage 50, and the person from whom I took over was only using an Excel spreadsheet for her bookkeeping. Yes, I only entered the bank balance, and unfortunately, did not even think of entering HST. (We are a small company and can't really afford a full time bookkeeper).

Unfortunately you have a bit of a mess.  If you take a look at your year end financials balance sheet, you will see all the accounts at a minimum that you missed the opening balances on.  It might be worthwhile to hire a consultant or talk with your accountant about getting this fixed up soon, before it gets too far out of control.

However, to accomplish what smithco was referring to, you will have to post a general journal entry on Oct 1 for any account on the year end balance sheet that had a balance as of year end.  Handling the opening balances for any customer (if any) invoices and vendor invoices still owing as of Sep 30/12 will be difficult to do at this point but it's not impossible.

Then when you do the next HST remittance, take the balance owing from the Balance Sheet as of period end and the details from the general ledger report for those HST accounts.  Because the Balance Sheet is cumulative, it will catch everything up.

In addition to what Richard is saying about entering the balance sheet items as of Oct 1/13 I would suggest that just prior to doing that you would pull up a journal entry report using start and end dates of Oct1/12 and uncheck the box 'Show Corrections as you do not want any adjusting entries to show. Now for all entries made on Oct 1 date those to Oct2/13. Then do your balance sheet entries as of Oct1/13. When you pull up a balance sheet of Oct1/12 it should show exactly the same as the original balance sheet. For the GST/HST remittances I always use the balance sheet to see what is owing/due for HST - print off a copy at last day of period to attach to your remit report as backup document along with the detailed ledgers for the HST period start and end dates..

You do not need to hire a full time bookkeeper - you can contract a bookkeeper to just look over your work from time to time preferably a minimum of once a month. As Richard says get in touch with someone very soon to get this corrected as is way easier now and less expensive than to try to do later.

Thanks for your help, but I'm not following exactly. I do have all the transactions entered for each account number from Oct to the present (our fiscal year). We don't do payroll internally, and we're a nonprofit, so we have minimal tax requirements (Our auditor files them for us). We don't have any investments or loans to account for either. When I look at the balance sheet, the only other things that don't have balances are the share capital (none) and inventory (none).

We didn't have any customers owing as of Sept 30, and I did enter the outstanding invoice amounts. (I did it this way, let's say our bank balance was $100 as of Sept 30, and we still had an outstanding cheque of $25, I entered, the starting bank balance as $75 on Oct. 1).

Regarding posting journal entries - I don't have any at all right now.

I'm not sure how to enter them correctly

Let's say I have paid $5,000 in HST to Oct 1.

Let's say I have received $7,000 in ITCs to Oct. 1.

I would guess that I enter it this way with an Oct. 1 date:

2370 HST Charged on Sales  $5000 Credit

2375 HST Paid on Purchases $7000 Debit

But I can't process that because they are not equal, so I'm wondering how I enter the amounts correctly or to what account I post the $2000 difference.

Essentially this is why we recommended you contact a consultant or speak with your accountant.  It looks like you just re-read your balance sheet from Sage 50, not the balance sheet from your yearend financials of Sep 30.  So you just told us what you did, not what you should have done based on the financial records of the organisation.  I am sure there are other opening balances that are missing, including Retained Earnings or the equivalent account.

The difference would go to the account probably listed as account 3560 but while the name normally is Retained Earnings or Retained Earnings Previous Years, it could be called Excess Revenue (Expense) or some other name as you are an NFP.  The account balance for 3560 will not be correct either but for now that's as good a place as any.  If you don't get it cleaned up by Sep/13, your auditor will have quite a bit of work to do.

Hi Sarah B,

I might have the answer.  Create a new account called "HST Payable".

2370 HST Charged on Sales = $5000 Credit

2375 HST Paid on Purchases = $7000 Debit

23?? HST Payable = $2000 Credit

When you pay the Receiver General or get a refund you will post one side of the entry to the bank and the other side to the HST Payable account.

Now, do this at the end of each quarter. On Sep 30th you will clear out the 2370 and 2375 so they equal $0 and post the difference to the HST payable account.  

Hope this helps.