Accounting for payment of tax withheld

I am attempting to account for GST that has been remitted. I have made a payment from my cash account and have applied this to the liability account “GST payable”. That transaction has correctly debited the “Cash on hand” account but is showing a suspense entry under Equity and the Liability account has not changed at all. Not sure what I am doing wrong.


Any assistance would be appreciated! Thanks

It should not have. A payment posts a credit to the source of funds, either Cash on hand or Cash at bank in Manager. Post a screen shot of the Edit screen of your payment.

First, update your software. You have not indicated or shown which version you are using, but many changes have been made recently at a very rapid pace. It is is possible you have a version with a bug.

Then, enter a Payee. In the case of a tax remittance, this is probably the tax authority.

Let us know if anything changes. If nothing changes, post a screen shot of the Edit screen for the GST payable tax code.

Thanks for the suggestions. I have updated the software to the latest version and added payee but nothing has changed. I’m not sure which screen you are referring to. Is it this one?

This is the updated payment edit screen:

I thought I would try and delete the payment and restart the application to see if it would make any difference. After deleting and restarting, the GST payable account is no longer available to select in my list of accounts!

But is still in my balance sheet:

There was a change a few months(?) ago which meant that you have to create tax liability account.

The built-in GST liability account is just a holding account until you create a liability account

Create a new GST liability account and edit your tax codes to refer to the new code.

You will then be able to select the new code in the payment transaction

This is explained in detail in the guide Create and use tax codes | Manager

No, that is the drill-down on the GST payable account. Go to the Settings tab, click on Tax Codes, then Edit for the tax code itself.

I was thinking along the same lines as @Joe91. But I believe he is slightly off the mark. The placeholder account is Tax payable. Many users make the mistake of renaming the placeholder account, which could cause this situation. If you renamed Tax payable as GST payable, that would be the explanation. Change it back and use a tax liability account from your localization (enabled by selecting your country in Business Details in Settings) or create your own tax liability account.

Thank you @Tut and @Joe91! With both your suggestions I have managed to fix the problem. I had made the mistake of renaming the default Tax payable account. I changed that back, created a new tax account and linked the tax code to the new tax account. All fixed!