GST: Fast Recording Pro's/Con's
by COBS Tech Support » Mon Sep 16, 2019 11:12 am
Fast Recording Tax Recording Method
The Fast Recording Method is normally the quickest way to record tax details pertaining to transactions and requires the least set-up work. When this operating mode is selected CAPITAL will prompt you for the tax portion of the whole transaction and will automatically allocate this to your tax account.
For example, if you are entering a supplier invoice of $110 and there is $10 tax pertaining to the transaction, using the Fast Record Method, you would enter the total value of the transaction ($110) and either have the system automatically calculate the tax percentage or enter this amount manually ($10). At this point the tax recording part of the transaction's entry is completed.
The primary advantage of Fast Recording Method is that you do not have to determine how the tax was derived from the various components of the supplier invoice. If the invoice states that the tax portion of the transaction is $10, this is simply entered in the system. This can often reduce or simplify data entry errors as little or no particular bookkeeping knowledge is required to determine how the tax information should best be recorded against various expense categories. The amounts as stated on your source documents are simply recorded in the system.
The primary disadvantage of Fast Recording Method is that tax reports cannot show how specific tax amounts relate to specific expense or general ledger accounts, as the tax information is not recorded in a way that connects these elements together. This can be problematical if your tax reporting requirements are complicated by other factors. (For example, if you sometimes need to claim back overpayments of tax in certain circumstances due to extraneous factors such as later changes in your cost calculations, foreign exchange realizations and so forth.)
It also does not enable you to provide answers to such question as: "How much tax did I apportion to vehicle purchases this quarter?" If you require answers to such questions (rather than just information on your overall tax expenditure for a particular period for all transactions), it is best NOT to use the Fast Recording Method. The tax reports produced when the Fast Recording Method is activated are not as detailed as those produced by the Detailed Audit Method.