Change GST Basis
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Change GST Basis
- 3 Minutes to read
- Print
- DarkLight
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WHEN CAN YOU CHANGE THE GST BASIS
- Must make the change at the end of a GST reporting period.
- Print your GST reports for the last reporting period
- Do a back up of your data
- Do NOT enter anything for the next period until you have rolled forward and made the change to the GST basis
How to change the GST basis:
Navigate to : "File > Configuration > Countries"
Select country > click on edit icon > select Tax tab > change GST basis
Changing from Accrual to Cash
PROCESS AFTER CHANGING BASIS and YOU HAVE ROLLED FORWARD:
- Create and map a new General Ledger account in the Balance Sheet named GST Cash Liability
- Print a list of outstanding supplier invoices and client invoices as at the end of the last Accrual GST accounting period (say 31 Dec), sorted by period
- The GST cash basis will be used to process all payments and receipts. The GST will be transferred from the Accrual Liability Account to the Cash Liability Account when the payment / receipt is processed
- GST would have been accounted for on invoices outstanding as at the end of the last GST period (eg 31 Dec). These amounts need to be identified and transferred back to the GST Accrual Liability account
PROCESS TO IDENTIFY GST WHICH WAS ACCOUNTED FOR USING PREVIOUS ACCRUAL BASIS
Print a list of outstanding invoices as at the end of new GST period
- Compare the list in No 1 above with the list of outstanding invoices as the end of the last GST Accrual period eg 31 Dec. The INVOICES THAT NO LONGER APPEAR AS OUTSTANDING HAVE BEEN PAID. THE DIFFERENCE IN THE AMOUNTS FOR GST BETWEEN THE TWO REPORTS INDICATE THE ADJUSTMENT (i.e. General Journal) NEEDED FROM THE GST CASH LIABILITY ACCOUNT TO THE GST ACCRUAL LIABILITY ACCOUNT.
- Do a general journal for the difference in GST for outstanding supplier invoices:
Dr Accrual GST Liability
Cr Cash GST Liability
And for Outstanding client invoices:
Dr Cash GST Liability
Cr Accrual GST Liability
- Prepare a reconciliation in Excel – reconciling the Cash Basis BAS report to the amount of the General Journal
- Short cut – print list of outstanding supplier invoice by period – export to EXCEL and determine which were paid subsequently
Changing from Cash to Accrual
When you change from the Cash to the Accrual basis, the GST on all unpaid invoices at the end of the GST period prior to changing to Accrual basis must be accounted for in the first GST period after changing from Cash to Accrual. After rolling over to a new period and changing the GST Basis, once you have made your GST payment for the prior GST period, you will need to transfer the amount paid from the Cash Liability Account to the Accrual Liability account.
Print a Costs By Kind Report covering the range of periods that have outstanding invoices, for each kind with the GST setting “Input Taxed”. Review these reports to see if any cost transactions on Input Taxed Kinds are showing as outstanding. If there are Input Taxed GST amounts outstanding, these need to be deducted from the total GST outstanding as a permanent adjustment. The reduced GST outstanding becomes the starting balance as at 30/06/202x.
Use a General Journal for this procedure, and date the General Journal the last date of the prior GST period. This will ensure that the adjustment does not show up in the GST reports for the current reporting GST period.
Example (Cash to Accrual as at 30/9/202x):
Net GST Liability as at 30/9/202x = $22,420.00
On 1/10/202x:
Change GST Basis in JobBag from Cash to Accrual
On 20/10/202x:
Make remittance to ATO
Do General Journal dated 30/9/202x:
DR Cash GST Liability $22,420.00
CR Accrual GST Liability $22,420.00
Need more help?
Please contact support, call 02 8115 8090 or email support@jobbag.com
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