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Microsoft Dynamics GP Canada

The Government of Canada has chose February 4, 2013 as the demise of the Canadian penny. The Royal Canadian Mint will no longer distribute the penny for consumer use as of this date.

The penny’s elimination is due in part to environmental considerations, significant handling costs, and excessive manufacturing costs. Initial estimates propose the measure will save Canadian taxpayers $11 million a year.

So what are the immediate changes for businesses?

– Businesses are encouraged to round all cash transaction to the nearest 5 cents
– Businesses are not legally obligated to accept the penny from customers after this date
– Businesses can make change using pennies from their cash registers if they so choose
– Payments made by cheque, electronic payment, credit or debit card will not change
– GST and PST amounts are unchanged. Only the total dollar amount after tax is rounded up or down

Rounding Transactions in Microsoft Dynamics GP

As Douglas Adams coined, “DON’T PANIC.” Dynamics GP is designed to accommodate this situation as described in the process below.

Receivables Transaction Entry or Sales Transaction Entry (when entering the CASH payment directly on the un-posted invoice):

  • Determine if you need to round up or round down to the nearest 5 cents
  • Use the Miscellaneous box to record amounts for rounding UP
  • Use the Trade Discount box to record amounts for rounding DOWN
  • The Miscellaneous or Trade Discount boxes should be non-taxable and mapped to an appropriate GL account, such as Cash Short/Over

In the example below, the invoice would be rounded down to $11.85 by entering $0.01 in the Trade Discount box. In the Amount Received box, enter $11.85. Do not change the Tax amount.

In Cash Receipts Entry (to pay posted invoices):

  • Determine if you need to round up or round down to the nearest 5 cents
  • Start the Cash Receipt and click Apply
  • Use the Writeoffs box in the Apply Sales Documents window to record amounts for rounding DOWN. Writeoffs should be mapped to an appropriate GL account, such as Cash Short/Over
  • For rounding UP, leave the overpayment unapplied
  • To clear the overpayment, create a debit note and enter the amount in the Miscellaneous box on the document, OR
  • Process all overpayments at once for multiple customers using the Write Off Documents routine

In the example below, the invoice is $11.86. To round the cash payment to $11.85, enter $0.01 in the Writeoffs box.

If you require assistance in your accounting processes due to the elimination of the penny, call Prophet Business Group in Winnipeg at 204-982-9890. Our software consultants are available to help you navigate through these changes and how they affect Microsoft Dynamics GP.

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