How to handle the penny phase out in AdWorks
Last updated: Dec 1 2014
Article ID: AW00010
What is happening:
In Economic Action Plan 2012, the Government announced it would phase out the penny from Canada’s coinage system. To help consumers, businesses, charities and financial institutions to plan, a transition date of February 4, 2013 has been set after which the Royal Canadian Mint will no longer distribute pennies.
On this date, businesses will be encouraged to begin rounding cash transactions.
For more information on this change, visit the Department of Finance Canada’s website (http://www.cra-arc.gc.ca/gncy/lmntnpnny/menu-eng.html).
Handling Penny Rounding in AdWorks:
Receive payments for Invoices for the exact amount you originally created them for. Do not round them up or down this will be handled when making deposits.
In your accounting system, create an Expense or Income account called “Penny Rounding” – it really does not matter which as long as this account is of an Income or Expense type.
When you make your cash deposit look at the final total amount to determine how much it needs to be rounded up or down to equal the amount of your actual cash deposit. This amount is typically from $-0.02 to $+0.02.
– If an Invoice is $45.06 then receive a payment for $45.06 even though your customer will actually pay you $45.05 because you have had to round down. (- $0.01).