I have just started using Manager and I made a BAS payment in July for the previous quarter which was in the last financial year, how do I show this amount in the spend money. Do I just assign it to tax payment or will that affect this quarter?
Just allocate the payment to
Tax payable liability account where tax (GST) has been accumulating.
Thanks, it won’t effect my tax liabilities for this financial year will it as I wasn’t using Manager last year.
Thanks for your help.
@Janine, you need to understand that what accounting tool you use has nothing to do with your tax liabilities. Those are set by law and remain unchanged if you change tools. Your liabilities for both last and this year depend on your income, expenses, possibly on whether you have been and are using accrual or cash basis accounting, and the law. When you adopted Manager, you should have set starting balances on appropriate accounts so your financial performance is accurately represented across the transition.
Thank you for the reply, so If i put in the starting balance for tax payments as the amount I have paid in July (which what was owning for the last quarter) and then “spend” that amount in tax payments my new liabilities for this quarter will be correct? Sorry for the questions I just know how important it is for it to be correct. I appreciate your help so much.
Yes, as the payment will zero out the starting balance, which means the liability account will only accumulate the current quarter tax transactions, then this process will repeat itself each quarter
Sorry I was not able to answer your question earlier, @Janine. If I understand your question correctly, @Brucanna has given you the right answer. I am assuming that when you mentioned spending “that amount” in tax payments you were referring to recording the payment of the amount you paid for last year’s tax bill. Recording the expenditure of money in this financial year against the opening balance the your tax liability would properly zero out the liability and reduce your cash balance. If that is not what you meant, please provide more details.
Having said that, whether you are doing cash or accrual based accounting will determine how these transactions show up on your profit and loss statement and how they affect your balance sheet.
Yes thankyou, that has sorted it out. Cheers
Thankyou so much, all sorted now. Cheers
Hi, I have discovered that there was an error made in my last BAS (in the last financial year) and I have amended my BAS with the Tax Office but now owe them a small amount of money. Do I just change my starting balance (GST) to reflect the debt and then make the payment against gst? I have only started using Manager this financial year.
I would appreciate someone’s help.
Rather then changing the opening balances which were based on a set of facts at the time.
Create a Journal so that the adjustment can be traced and identified if needed in the future.
In the Journal
First line: Account = Owners Equity - Debit Column = amount
Second Line: Account = GST - Credit Column = amount
Add an appropriate description
Thanks, once again to my rescue!