Managing linked categories

• Equity category for current earnings: This category helps you track your profit (or loss) for the current financial year. At the start of a new financial year the balance of this category is transferred to the equity category for retained earnings. You can’t change this category. See also Income allocation.

• Equity category for retained earnings: This category helps you track the cumulative profit (or loss) of the business up to the start of the current financial year. At the start of a new financial year, the balance of the equity category for current earnings is transferred to this category. You can’t change this category. See also Income allocation.

• Equity category for historical balancing: This category is used to balance your categories list and balance sheet report. As a rule, the value of your assets must equal the combined value of your liabilities and equity. If you haven’t entered all of your opening balances, or a value was entered incorrectly, a “balancing” amount will be allocated to the Historical Balancing category. Once you enter all your opening balances accurately, this category will return to zero. See also Entering opening balances.

• Bank category for electronic payments: This is a clearing category that’s used to keep track of electronic payments that haven’t been processed yet. The payments are cleared from this category and withdrawn from your bank account when you pay your employees or suppliers electronically.

• Bank category for undeposited funds: (feature not yet available) This is a clearing category that you use to keep track of receipts that haven’t been deposited directly to your bank account (such as cash and cheques).

• Asset category for tracking receivables: This category is used to track the total amount that customers currently owe you. The balance will increase automatically when you record an invoice, and decrease when a payment is made.

• Bank category for customer receipts: This is the default bank category into which customer payments are deposited. If you have more than one bank category for this purpose, select the one that will be used most. You can select a different bank category when recording the receipt.

• Income category for freight: This is the category you want to use for freight you charge to customers on invoices. Amounts you enter into the Freight field on a sale will be allocated to this category.

• Liability category for customer deposits: (feature not yet available) This category is used to track deposits you collect from customers when recording a sales order. If you enter an category in the Amount paid field of a sales order, the amount will be allocated to this category.

• Expense or cost of sales category for discounts: This category is used to track payment discounts you give to customers when entering their payments.

• Income category for late charges and surcharges: This category is used to track finance charges you collect from customers. By default this category is used for customer surcharge payments for online invoice payments.

• Liability category for tracking payables: This category is used to track the total amount you currently owe to suppliers. The balance will increase automatically when you record a bill, and decrease when you make a payment.

• Bank category for paying bills: This is the default bank category from which bill payments are made to suppliers. If you have more than one bank category for this purpose, select the one that will be used the most. You can select a different bank category when recording the payment.

• Liability category for item receipt: (feature not yet available) This category tracks the stock you receive from a supplier without a bill on a Receive Items transaction. This category will be cleared when you record the bill for the stock received.

• Expense or cost of sales category for freight: This category is used to track freight amounts you pay to suppliers.

• Asset category for supplier deposits: This category is used to track deposits you make on purchase orders. If you make a payment against a purchase order, it's considered a supplier deposit and the amount will be allocated to this category.

• Expense (or Contra) category for discounts: This category is used to track payment discounts suppliers give you which you enter when making a supplier payment. Learn about Supplier discounts.

• Expense category for late charges: (feature not yet available) This category is used to track finance charges you pay to suppliers.

• Bank category for cash payments: This is the bank account from which you withdraw cash to pay employees. This includes employees you pay by manually transferring funds into their bank account (not via bank file or direct payments from MYOB). Amounts will be posted to this account when you record a pay run, based on the employees whose Payment method you've set to Cash. Alternatively, this can be a clearing account that helps you track the total cash that needs to be withdrawn from your bank account.

• Bank account for cheque payments: This is the bank account from which you write cheques to pay employees. Amounts will be posted to this account when you record a pay run, based on the employees whose Payment method you've set to Cheque.

• Bank account for electronic payments: This is a clearing account that’s used to keep track of electronic payments that haven’t been processed yet for your employees. Amounts will be posted to this account when you record a pay run, based on the employees whose Payment method you've set to Electronic. The payments are cleared from this account and withdrawn from your bank account when you make electronic payments. Learn more about electronic payments.

• Default employer expense account: This is the default account that’s used for Employer Expense type pay items. Employer Expense pay items are used to track payments you make on behalf of your employees, eg. WorkCover Insurance. You can specify a different account when setting up the pay items.

• Default wages expense account: This is the default account that’s used for Wages type pay items. Wages pay items are used to track employee wage and salary expenses. You can specify a different account when setting up the pay items.

• Default tax/deductions payable account: This is the default account used for Deductions and the Tax type pay items. You can specify a different account when setting up these pay items.

• Bank category for cash payments: Not currently used

• Bank category for cheque payments: Not currently used

• Bank category for electronic payments: This is a clearing category that’s used to keep track of electronic payments that haven’t been processed yet for your employees. Amounts will be posted to this category when you record a pay run for those employees who have been set up for electronic payments. The payments are cleared from this category and withdrawn from your bank account when you make electronic payments. Learn more about electronic payments.

• Default wages expense category: This is the default category that’s used for earnings pay items (wages, salary and allowances). You can specify a different category when setting up your earnings.

• Default KiwiSaver expense category: This is the default category that’s used for employer KiwiSaver contributions and ECST tax (expenses).

• Default employer deductions payable category: This is the default category used for employee, employer and ECST for Kiwisaver to be paid to IR. This includes child support and PAYE.

• Default other deductions payable category: This is the default category that’s used for any other deductions.
  
  

Only linked categories with a checkbox can be turned on or off. To turn off one of these linked categories, deselect the checkbox.

For example, if you don't pay deposits on supplier purchase orders, you can turn off this linked category by deselecting this checkbox.

Some feature-level categories can only be changed but not turned off, even if you don't use the feature they're linked to. These linked categories are the ones without a checkbox next to them on the Linked categories page, like the Asset category for tracking receivables and the Bank category for customer receipts.

Also, if you've selected one of the optional linked categories (those that have a checkbox next to the linked category such as I charge freight on sales) and used it in a transaction (for example, you've recorded a supplier deposit on a purchase order), then you can't turn off that linked category option. This ensures that MYOB can maintain a complete audit trail.

There are two feature-level linked categories that can’t be changed - The Current Year Earnings and Retained Earnings categories. These must be kept as is. If you have a partnership or trust and want to split the current or retained earnings, see Income allocation to learn how to best handle this requirement.

The categories list only indicates the linked categories are set up at the feature level. When setting up items and other records, you can specify additional linked (default) categories —see 'Record-level linked categories' above. These accounts won’t be shown as linked in the Categories (Chart of accounts) page.

You can, but it can affect your reports, especially reconciliation reports. These reports assume the linked category has not changed during the selected reporting period, and so may not show complete information.

When you buy and sell, any applicable tax/GST needs to be tracked. This helps with your tax reporting obligations. This is handled in MYOB by using tax codes.

Some types of tax codes require linked categories for tracking tax collected and tax paid. The balances of these linked categories represent how much tax you have collected on sales and how much tax you have paid on purchases. These values are used when lodging your activity statements (Australia) or GST return (New Zealand).

If you're not sure which categories should be used for tracking tax collected or tax paid, check with your accounting advisor.