Chart of accounts and tax codes #
Manu Online is always connected to a accountancy system. This enables invoices to be transferred seamlessly to your accounts where they are processed for payments, tax returns and official reporting purposes. So that handling of the invoices after they are transferred to the accounts system can be completely eliminated, Manu Online transfers the nominal codes and tax code for each invoice line together with the invoice. Because each company can have an individual list of nominal codes (i.e. the chart of accounts) then this list needs to be imported to Manu Online at the time the system is setup.
Tax codes are used by accountancy programs to indicate the type and amount of tax on each invoice line. Different systems use different codes, and normally there are different codes which depend on the country of registration of your company. Generally each nominal account has its own code but in most systems this is just a default so that the entries can have different codes depending on the data entered to them by the user. Note that tax codes need to be used because the tax rate alone is not enough for reporting to authorities. For better or worse in this world, there is a difference between a tax rate of zero, no tax, and outside of the scope of tax. (Generally only accountants and government officials can understand the difference, but that is why we have tax codes instead of just a tax amount.)
When a new company is registered for the Manu Online service, the accounts program will be chosen. For English language markets, this is currently a choice of Xero or Sage One. This account will be created with either the Xero or Sage One tax codes appropriate for that country. E.g. Xero in the UK has its own tax code for normal VAT sales of “OUTPUT2”. This indicates that the sales is domestic with a VAT rate of 20%. In Australia the system will refer to a GST rate of 10% with a tax code of “OUTPUT”.
To get the VAT or GST or sales tax showing correctly on orders and invoices, your system need to have accounts and tax codes set up correctly. For “normal” business operations, everything will be just fine so long as you import the chart of accounts after you login to the system as described below.
Importing the chart of accounts #
After logging into Manu Online for the first time, we strongly recommend that you connect to your accounts system and import the chart of accounts.
This is very easy to do from the first page of the system. Just press connect, then enter the credentials for your accounts system into the popup, approve the connection and then close the popup. At the same time you can also import any partners (aka contacts) and items (i.e. stock items).
This will not make any changes to your accounts system, and if you want you can disconnect after the import.
If you need to add new accounts to the chart of accounts, you can run the import again.
The system will make a best guess as to which accounts should be used for sales and which for purchase. In Admin – System settings, you switch on or off the listing by going to the chart of accounts popup. You can also switch on or off the listings for tax codes.
It is not possible to delete the chart of accounts from Manu Online. If you wish to do this, then please contact support.
Defaulting accounts and tax codes to orders and invoices #
The best way to deal with accounts and tax codes is to set them up as defaults so that they will always come correctly to orders and invoices without need for the user to pay much attention to them.
Sales orders and purchase orders only need the tax code, not the account as well. The account is needed at invoice time. This design is so that buyers and salesmen can have one less thing to worry about. Tax codes are needed however on orders so that the correct tax amount can be shown to the customer on the order confirmation. The tax code defaulted to an order will be that of the default account for that partner, or if none is specified, the default account of the organisation set in set in Admin – System Settings – Default terms tab. If it is not specified there either, the default will be the first tax code in order e.g. 20% VAT in the UK or 10% GST in Australia.
If you sell items with different tax rates (applies to items such as food or children’s clothes depending on your country) it is also possible to override tax code received from the partner’s default by setting the tax rate of an item. (VAT rate/GST rate etc.) This will then lookup the appropriate tax code depending on the partners location (Domestic, Export or EU if applicable), and use this in the order.
Using different tax codes on one account #
Manu Online can allow or disallow using non default tax codes on nominal accounts. This setting is set in Admin – System settings. It is up to you and your accountant how you want this to be set.
For example if you want it so that account 200 – Sales can only be used for domestic sales (20% VAT in the UK) then put a check in the “Tax code must be same as accounts”. If you are ok that 200 – Sales can have both domestic and export sales, then leave it unchecked.
Tax codes must be the same as in your linked accountancy system #
If you create tax codes for your own purposes (common in locations where there are city and state taxes), make sure that the tax codes exist in both your linked accountancy system as well as in Manu Online. In most connected systems, invoice transfer will fail if a tax code is used that is not in the accountancy system.