Introduction
Everyone remembers experiences with accounting in which the months just don't add up... The problem is that we want to take a garage mechanic and get him to become an accountant. In effect, we want him to understand the notion of credit and debit with accounts receivable and payable, then we mix liabilities and assets. In short, we take a mechanical expert and mix him up with lots of terms that are abstract to him!
Developing a strategy based on simplicity is therefore essential to the success of any workshop wishing to do its own bookkeeping. What will be described in the following paragraphs applies mainly to small mechanical workshops that don't have an in-house accountant. The key to simplified accounting lies in a single trick: bypass the general ledger module and pass all workshop transactions through the purchases and sales module.
Sales are fine, everything goes through GEM-CAR, but what about the other transactions in the general ledger? You can eliminate this module to 99% by creating a supplier with products and a corresponding general ledger code:
Bank
Bank charges,
NSF fees,
Credit card fees,
Director's fees and Corporate credit cards
Product for all expense categories (one GL per category)
Revenu Quebec
DAS,
QST,
CRA
GST, VAT,
DAS deductions,
By working this way, it will be easier to untangle yourself, as there will be more traces.
End of the month or end of the year?
You'll let your accountant make his regularization and amortization entries at the end of the year in his general ledger module. You'll have a simplified balance sheet based on your sales and purchases. If you keep an inventory, you'll need to take account of the variation in it, but this is the main element that can bring about a significant variation.
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