I could not find the answer to my problem in the help or the knowledge base so I asked www.openai.com GPT4. I have now started to act on this advice and it certainly seems to work.
Does anyone agree or disagree with this or suggest a way to make the process a little easier.
I have asked the AI a huge range of questions, on a diverse range of topics, over the last few weeks. I was surprised to find it was quite happy to answer this one. Note its important to put plenty of detail. In the question… Often either re-asking a modified question or a follow up. Question is needed. GPT 4 (rather than GPT3.5) is noticeably better but can only be accessed with a paid pro account
I am the treasurer of a small charity. The charity receives fees x% off which must be paid to others. Accounts are kept with the free online accounting at www.quickfile.com. How should I account for that x% liability in the accounts
As a treasurer, it’s important to keep your financial records accurate and up to date. To account for the x% liability, you’ll want to use the accrual accounting method. Accrual accounting records financial transactions when they’re incurred, rather than when the cash is exchanged. This ensures that your financial statements reflect the charity’s financial position accurately.
Here’s how you can account for the x% liability using QuickFile:
- Create a new account:
a. Go to the Chart of Accounts (under ‘Reports’).
b. Click on ‘Create a new account’ at the top right corner.
c. Create an account called “XX Liability” and set the category as ‘2300 - Other Creditors’ (or a similar category that suits your needs).
- Record the fees:
a. When you receive a fee, create a sales invoice for the full amount.
b. Allocate the payment received to this invoice.
- Record the x% liability:
a. Create a journal entry to record the liability (go to ‘Reports’ and then ‘Journals’).
b. For each fee transaction, debit the “XX Liability” account by x% of the fee.
c. Credit the “Mooring Fee Income” account (or a similar income account) by the same amount.
- Pay the liability:
a. When it’s time to pay the Canal and River Trust, create a purchase invoice for the amount due.
b. Allocate the payment to the “Canal and River Trust Liability” account.
This method ensures that your financial statements will reflect the liability accurately and help you track the amounts due. Make sure to review your transactions periodically and consult with an accountant if you have any questions or need further guidance.