5.2 Update Notes

The new update to MoneyWorks (5.2) offers enhanced PST and Sales Tax handling for North American users. Although these changes will not affect users in other regions, MoneyWorks 5.2 files cannot be opened by earlier versions of MoneyWorks 5 (this is to preserve the integrity of the new tax handling). A summary of other changes is given at the end of this document.

Sales Tax: Key Changes

A tax can now be specified as being of type "GST/VAT" or "Sales Tax". A Sales Tax, when used on purchases/expenses, is expensed to the originating GL code; a GST/VAT tax is accumulated into a asset account, as it will be reclaimed at some point in the future.

The previous two tier tax option (used in Canada) is no longer available and has been replaced by a Composite tax type;

In sales tax locales, the total tax amounts for a purchase can be entered directly into the purchase transaction if necessary (useful when there is some apparently random tax amount on the purchase transaction);

A Sales Tax report has been added (to be used to itemize types of sales tax, as opposed to using the GST report).


MoneyWorks will automatically update your tax codes based on your existing ones. It is important that you check this after opening your file, and if necessary make any modifications. Because these tax rates are not backwards compatible, you will not be able to subsequently open your file with older versions of MoneyWorks, so it might pay to take a backup of your existing data file beforehand.

Tax Types

A tax in MoneyWorks 5.2 can be one of three types:


GST or VAT:  These are as per the original taxes in MoneyWorks. The tax collected must be remitted to the authorities, net of the tax paid on expenses.

Sales Tax:  For sales, these are collated and paid to the authorities. For purchases and expenses, they are not reclaimable and must be expensed.

Composite Tax:  Is a calculation based on other taxes. Thus in Ontario, the tax is GST + PST, whereas in Quebec it is GST * QST. In the U.S. It might be STATE+COUNTY+CITY.

There are a few rules about composite taxes:

  1. If a tax is based on a GST/VAT tax, these must be the first taxes in the calculation (i.e. GST + PST is OK, but PST + GST is not);

  1. A maximum of 2 GST taxes are supported in one composite tax (e.g. GST * QST);

  1. Composite taxes cannot be modified once they have been used in transactions. You can change the rate of the components, but not the structure of the tax itself;

  1. Composite taxes are calculated top down. Normally the taxes are considered to be independent, but there is an option (Mult) to indicate that a component tax applies to the previous taxes (i.e. is a “tax on a tax”), as in QST and PEI PST. Thus, for the tax illustrated:


TAX is calculated as (G + P) * CIT, and not as G + (P * CIT). i.e. CIT is a tax levied on amounts inclusive of both the G and P taxes.

Tax Table Conversion

When you first open your file in MoneyWorks 5.2, the tax table will be automatically converted to take advantage of the enhanced tax system. Thus the following table:


Will be converted to:


Note that a new tax code "P" has been added, with the name "PST base rate".

Further, the old-style two-tier tax code of "T", which was originally specified as:


Has been changed to a new composite tax code:


The Mult check box is used for a "tax on tax", such as QST. Thus:




Conversion of PST Holding account (Canada)

If you had specified a PST Holding account as part of the GST finalization, this account will be converted to a tax control (liability) account and used to accumulate PST collected. If you didn't have such a holding account, we recommend that you create one (an account of type Tax Received), and assign that as the control account for your PST tax codes. This way your PST liability will be kept separately in the ledger from your GST liability.

Sales Tax on Transactions in MoneyWorks 5.2

Sales Tax is handled differently for purchasing (i.e. Creditor Invoice and Payments) than for sales (Debtor Invoices and Receipts). When an item is sold and sales tax is added, you need to remit that tax to the appropriate tax agency. When an item is purchased that includes sales tax (i.e. without an exemption), the sales tax becomes part of the purchase price of the item.

For a Sales Transaction, MoneyWorks generates additional "system lines" for the transaction, one for each base tax used. Normally you will not see these additional lines; if you want to view them you can print the transactions with the "Show full details/Show as debits and credits option", or look at the Detail Line list. The lines are used to report your sales tax liabilities. Thus the following transaction:


Is actually coded as:


Here the Sales Tax S was made up of a composite State Tax (7.5%), County Tax (2%) and City Tax (1%). The final two lines are the inventory adjustment lines.

For Purchasing, MoneyWorks needs to add the sales tax to the cost of the purchase. MoneyWorks does this automatically when you save the transaction—the amount of tax that was allocated in this manner is stored on each line of the transaction in a field called ExpensedTax (you can customize the Detail List view to see this if you wish).

Thus the following purchase:


Results in the following accounting. Note that the sales tax paid has been added to the cost of the items:


Entering Non-standard Sales Tax on purchases

For purchases, it is not always clear from the docket how the sales tax was derived—taxable status for individual line items may not be given, so the taxes seem to be an arbitrary amount of the invoice total. When this happens, you can force a specific tax spilt on the transaction, and modify the taxes so they appear as on the purchase docket. To do this click the Down-Arrow in the Tax amount at the bottom of the list:

droppedImage.pict   droppedImage.pict

The Tax Override window will be displayed.


This shows the accumulated tax from all lines of the transaction. You can change the amounts by overtyping. Click the New icon droppedImage.pict  to add another base tax if needed.

When you click the Apply button, new tax lines will be added to the transaction representing the taxes you have specified. So the above tax override applied to the following entry:


would result in the following:


Note that the tax has been removed from all lines of the transaction and reallocated in the new lines at the end. Also note that these lines are coded to the same general ledger code as the first line of the transaction, so all sales tax will be expensed to that code. If you override the tax on a Product transaction, MoneyWorks will use a special product ~TAX to add the additional lines (it will create the product if necessary).

You can reset the tax to what MoneyWorks thinks it should be by clicking the Tax amount to re-open the Tax Override window, and clicking the “Defaults” button.

Sales Tax Report

The Sales Tax report has two modes (three if you count the Documentation mode):

Sales : This is the primary mode. The report lists the sales tax you have collected, and summarizes it by base tax type.

 Transactions entered in versions of MoneyWorks prior to 5.2 will be shown in blue—MoneyWorks cannot break the tax in these into constitute parts (such as State and City), so the total tax is shown.

Purchases : This mode is for checking historic "purchase" transactions (i.e. those that were entered prior to MoneyWorks 5.2)—as such its utility will diminish over time. In these transactions the sales tax will not have been expensed. The amount required to correct this is shown in a journal. Canadian users should not use this mode as it doesn't understand GST—instead use the PST Expense Allocation report.

What else is new in 5.2:

New functions in form and report writer:

 Trim() function: removes leading and trailing spaces from text

 Pad() function: Pad text to a specific length

 Find() function: find field value(s) in database

Reports may be saved as non-modifiable (run-only):

 Hold down Shift-Option (Mac) or Shift-Ctrl (Windows) and choose File>Save Report As. This will stop others seeing or modifying the report logic, but is a one way trip, so make sure you keep a modifiable version.

Allow bank accounts in invoices

 Useful for paying credit cards where they are set up as a MoneyWorks bank account

Manually raised payments on invoices: Now allow zero valued payments.

 This allows you to contra multiple credit notes against multiple invoices.

QIF Import now supports Paypal-generated QIFs

Added Ghanaian New Cedi currency code!