I have a small issue with the calculations for the “GST Calculation Worksheet for BAS”.
The “GST Payable” liability account records transactions to the cent - as it should, but the BAS Statement I need to return to the Tax Office every 3 months just leaves off the cents. It doesn’t “round” the numbers, it just throws away anything less than $1 on every data entry field.
The nett result, is that once the Tax Office confirms the amount of either the refund or debt, it will be anywhere from a few cents to several dollars different from what the GST Payable account is holding. Over time these differences build up to become a small but significant sum. Over the last 12 months, my GST Payable account has built up $13.50 in additional GST credits that should have been refunded, but won’t ever be because the Tax Office didn’t count the cent portion of any relevant transaction amounts.
Is there / should there be a setting to control how these numbers are calculated. Also, as a carried forward negative tax liability, I’m not sure what to do with this sum? Do I just write it off as a bad debt?
Adjust out these rounding each quarter when you make the payment of receive the refund so the next quarter starts from zero. Pick an account like Bank Charges for these minor rounding debits/credits.
I have seen a lot of businesses create an expenses account in the P&L that is simply called “GST Rounding Acc”. As previously mentioned , you post to this account the diffrence in the rounding on the BAS for each period you lodge when you process the payment . I hope this is helpful.
Sorry for being a bit slow to understand, but can someone explain how exactly this is done.
Suppose I have bought goods over the past 3 months that contain GST of $84.53. This money has already been paid to the ATO indirectly via my purchases and therefore appears in my Expenses and Tax Payable (refundable) accounts.
When it comes time to claim back the GST, I submit a BAS and receive $84.00, leaving $0.53 in Assets under Tax Payable (refundable).
How do I adjust for the discrepancy? What is the process? Presumably not a payment since I have already paid the money. Is it a Journal entry since I need to balance the Tax payable account with a, say, Sundry Expense account?
Your help would be appreciated.
You could do a Journal but you also can do the adjustment when you do the Receive Money for the 84.00
On the first line use Account - GST Refund Due for 84.53
On the second line use Account - Sundry Expenses for -0.53 (note the minus)
Now the Receive Money totals 84.00
Note: you only need to use Settings - Base Currency if you are requiring to use multiple currencies, otherwise leave it blank.
@dram, what @Brucanna says is true. But it will leave you with no currency symbol on completed forms or reports. For many users, that’s fine, even preferable because it reduces clutter. But if you want the $ to show, you still have to select AUD as your base currency.
Many thanks for your advice @Brucanna and @Tut.
I ended up making the adjustment in the Receive Money entry as it keeps the ATO payment and the adjustment together in a way I understand bette and hence preferr. Maybe not being an accountant makes me avoid Journal Entries where possible.
Just for the record, in case anybody else needs help with this too, here is the end result:
