GST on Expenses should go to different GL Account

(Australian Situation) Is it possible for GST paid on expenses, (GST Receivable), to be linked to a separate account other than Tax (GST) Payable and if so, how can this be achieved? I have set up a tax code called ‘GST Receivable’ but cannot for the lif of me work out how to connect this with a GL code of the same name.

As a financial controller of many years, my experience has shown this to be the usual way to reflect GST in the ledger, usually with a subtotal of net GST Payable / Receivable.

Any help would be greatly appreciated.

I think the short answer is no, as the BS Tax Payable account is a control account (hard coded) to the Tax Codes. There is currently (#1 on the roadmap) under development a feature called Custom Control Accounts, which will enable users more flexibility with subsidiary ledgers - e.g. place Credit Card/overdraft accounts as liabilities instead of being grouped with bank accounts under assets. If it will extend to GST paid/received being posted to separate accounts, I don’t know as there is no direct subsidiary ledgers involved.

Roadmap comment - Currently all subsidiary ledgers flow into predefined control accounts. For example, all bank accounts will report under Cash at bank account. Custom control accounts will allow to specify how subsidiary ledgers should be presented in general ledger.

Thanks Brucanna,

Understand what you are saying. . . .my way of thinking, and I’m not a programmer, would be something to the effect of, under each tax code, an ability to link that code to a control account or indeed all to the same account as is done at the moment.

just my thoughts. . . thanks again

Generally, Taxes like GST/VAT only require one code as they are applied to Sale Invoices. When you are processing Purchase Invoices, the tax component is only an accounting offset.

So to do as you suggest you would need either 1) to have a Tax Code for Sales and a Tax Code for Purchases which are directed to specific COA’s or 2) have Manager programmed to put Sales Invoice and Purchase Invoice tax figures to separate COA’s.

If (2), then Journals need a tick box - Sales or Purchases related transaction if taxes are involved.

You can view the GST collected on sales and GST paid on expenses from the Tax Reconciliation report and the Tax Transactions report. I find it more convenient to include in one GST liability account the GST collected, GST input credits and GST paid to the Australian Taxation Office.

The balance of the GST liability account should equal the net GST applicable to the next Business Activity Statement.

If your business operates on a Cash Basis you can compare the balance of the GST account from the cash basis Balance Sheet or Trial Balance to the GST Calculation Worksheet applicable to the next BAS period to ensure it is correct.

The Manager treatment of GST transactions complies with A New System (Goods & Services Tax) Act 1999. Even though some older accounting programs have separated the GST received from GST paid into their own accounts it is possible it was done in haste to adapt a system previously developed to the GST system.