If your business involves Import of Goods, most likely you will also have to deal with Custom Duty and Freight. Here is how you can record them using Biztory:
You purchased goods from oversea that cost RM1621.51 (USD 249.00). Your shipper/forwarder pay the import GST and custom duties on your behalf and send you the bill.
Cost of goods: RM1621.51 (USD 249.00)
Custom duty (5%): RM81.08
Import GST (6%): RM102.16
Free Commercial Zone: RM5.00
First of all, you need to prepare a few extra things before recording your Import of Goods.
1. Create a new Wallet - Purchase in suspense.
2. Create a new payable payment method - Purchase in suspense
3. Create a new Chart of Account - Purchase (Import) , under Account Type Direct Cost. You can fill in any description and code at your convenience.
4. Create a new Chart of Account - GST Expense , under Account Type Expense
5. Create a new Expense Category - Purchase (Import) with tax code IM, and associate it to Purchase (Import) account
6. Create a new Expense Category - GST Expense with tax code OP, and associate it to GST Expense account
1. Create a Purchase Invoice to record what you had imported from your supplier. This Purchase Invoice should not have GST.
2. Create a new Expense under category Purchase (Import) that you had just created. This amount is the sum of your purchase cost and Custom Duty being charged on the imported goods. This Expense should be paid with the new payment method - Purchase in suspense.
3. Create a new Expense under category GST Expense. This Expense records the GST being charged on your imported goods + Custom Duty.
4. Pass a new journal as below to reverse duplicate entries in your GL:
Purchase in suspense - Debit: total of your purchase cost + GST (recorded in Expense Purchase (Import))
GST Expense - Credit: total of GST charged on your import goods (recorded in Expense GST Expense)
Purchase (Import) - Credit: total of purchase cost (recorded in Purchase Invoice)
Verify your Transactions:
Your Input Tax is recorded (and claimed) correctly.
Your Profit & Loss is also captured the correct amount.
Your ledgers are knocked off respectively.