A quick and successful integration between DEAR and other accounting software depends largely on the quality of the initial setup. One of the critical elements of the initial setup is a Chart Of Accounts. DEAR generates accounting transactions in the background and at a later stage these transactions are exported to your chosen accounting software. All settings must be set up before any initial data load occurs (supplier, customer, products, stock on hand), buys, sells etc.
There are two broad scenarios for Chart Of Accounts to be maintained:
- No accounting software integration is available. In this case the user can load default Chart Of Accounts that contains all required accounts or create custom chart of accounts manually.
- Integration with Xero or QBO is available. In this case Chart Of Accounts in DEAR will appear as read only and all maintenance of accounts must be done in the accounting software.
The following accounts must be created in DEAR for Scenario 1 and in Xero/QBO for Scenario 2:
- Accounts Receivable (A/R)
- Accounts Payable (A/P)
- Supplies & Materials – COGS
- Sales Tax, GST, VAT
Once Chart Of Accounts has all the required accounts, Account Mapping needs to be performed in order for DEAR Inventory to recognize what accounts must be used in most typical situations like buys, sells etc. DEAR has a dedicated screen Account Mapping where this set up must be performed. These settings are mandatory as the system won’t function properly if some or all of the accounts are not set.
Product level account mapping
Default settings can be overwritten at product level and each product can have a specified Inventory Account, Revenue account, Cost of Goods Sold Account. This will allow you to implement a “product-centric” cost and revenue analysis.
Supplier Level & Customer level customization
Further customization can be done at Customer and Supplier level:
Supplier screen allows you to change the default Accounts Payable account, Tax Rule and Payment Terms that will be applied when you process an invoice from the given supplier.
If you are importing goods you may set Tax Rule to ‘No Tax’. Otherwise select any other rule applicable.
If you set a Supplier currency different to your base currency, DEAR will automatically apply a currency conversion rate effective at the time when the document is created.
The customer screen allows you to change Account Receivable account and default Sale/Revenue account. This will allow you to implement ‘customer-centric’ revenue analysis.
You are also able to change Tax Rule and Payment Terms that will be applied when creating Invoices for a given customer.
If you are exporting goods you may set Tax Rule to ‘No Tax’. Otherwise you may select any rule applicable. If you set a Customer currency different from your base currency, DEAR will automatically apply a currency conversion rate effective at the time the document is created.
Purchase/Sale Invoice level customization
All defaults can be overwritten again at the document level at the time of creating a new purchase or sale invoice. The Sale screen allows you to modify Sale account and Tax Rule. You are also able to adjust Sale Account at invoice line level if required. Additional costs can be allocated to a different sale account and different tax treatment can be applied as well. When selling to other countries DEAR will pre-fill conversion rate field with the most recent rate, this can also be manually amended.
Purchase screen level customization
The Purchase screen allows you to modify the Inventory Account where stock should be allocated. You are also able to adjust the Inventory Account at invoice line level if required.
Additional costs can be allocated to the same Inventory Account to form landing cost of your stock; alternatively it can be any expense account if you don’t capitalize additional costs.
You are able to specify different Tax rules for additional costs as well. When selling to other countries DEAR will pre-fill the conversion rate field with the most recent rate, which can be manually amended. Tax rule can be modified here depending on whether you are buying from overseas or from an area with different tax policies.