How best to account for odd GST amounts

One of our suppliers probably has a mistake in their invoicing system because I can in no way align GST with any particular items on the tax invoice. There is supposed to be a star to indicate taxable items (most things on this invoice are not taxed—food items) but the amount of GST reflected on the invoice does not add to 10% of any one or several items combined.

For argument sake there are 8 items on the invoice. It totals $66, and there is only $1 GST on the invoice.

My (uneducated and totally naive) thought is to create some sort of GST paid account and indicate all items on the invoice as tax free making the invoice as a whole GST free and making it an expense for food items in the amount of $65 and then adding an item on the next expense line as $1 GST paid.

Is this an acceptable way of doing it, and if so, how do I do it? :slight_smile:

Perhaps you should advise the supplier that their invoices are presented incorrectly. Surely they must have other customers who are suffering the same problems. Fixing the source would be best.

Otherwise your solution would be; make the first line of your purchase invoice a value which equates to the GST then the 2nd line would equal the balance of the suppliers invoice. Using your example of 1.00 GST and GST at 10%

The first line value would be 10.00 with a GST of 1.00 (tax exclusive)
or the first line value would be 11.00 with a GST of 1.00 (tax inclusive)
The second line value would be 55.00 - giving an invoice total of 66.00

Then Manager will put the GST in the correct account without needing special accounts outside the standard tax recording/reporting system.

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Spot on, good simple solution.

The “supplier” in this case is more of an emergency supplier in that they can locally provide exotic supplies but only do so at a retail price. They offer no discount what-so-ever. We only use them in a pinch as we source most everything from the capital city directly.

That’s not to negate their requirement to record it correctly, just more of a recognition they are an end seller themselves (generally) and we (and others) don’t normally use them.

And I will be bringing it up next time we are in the area, although I already know what their response will be :slight_smile:

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It makes absolutely no difference where a business sits in the supply chain, there would be a legal requirement that any GST items on an invoice/cash register receipt be appropriately indicated with a * or something. Perhaps your response to the response could be something like - perhaps you would prefer a visit from the authorities (and leave it hanging).

This is one of those usually CASH ONLY type businesses, and most items are GST free anyway (food items).

I agree with you whole heartedly. I wasn’t making excuses for them.

It’s their problem so I’ll leave it to them to sort out and is as far as possible, as I said, they are only an emergency supplier when we do get our act together lol

I did have other people check the tax invoice so it is not that I’m going blind (the bottom states there should be a star(s) and there isn’t a single star on the page).

Perhaps then its a printer issue - the * is occurring either outside the printer’s print area or the paper alignment

Actually that was my first thought. However, no matter how I work the numbers, the GST amount is not 10% (inclusive or otherwise) of any single or multiple amount. I really don’t think there’s anything untoward other than it has been setup incorrectly.