DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Treatment of GST in Manager


#1

Hi I am trying to workout how to record GST payments to the ATO in Manager.

I currently have a liability account called tax payable… for some reason it shows as a negative liability (i.e. value is a negative dollar value)

Every transaction for which GST is applicable gets recorded in this account… both in and out.

When the business receives payment of an invoice for which GST is charged to my customer, it reduces the balance.

When the business makes a payment for which GST is charged, it increases the balance.

When I receive a payment from the ATO (i.e. when they own me money), it reduces the balance in the account (i.e. less negative)…

When I make a payment to the ATO (i.e. when I owe them money), it increases the balance in the account (i.e. more negative)…

My question is: Is this correct??

If not, what am I doing wrong here??


#2

Sounds pretty right to me… It is a GST Payable account, so it records what you need to pay to the Tax Office (if the balance is positive). If the balance is negative, it shows how much the Tax Office owes you (a negative payable, is a receivable).

So when you collect GST from a customer, the amount you need to give the Tax Office increases, and when you pay GST to a supplier, the amount you need to give to the Tax Office decreases. Similarly, if the Tax Office owes you $200 (GST Payable = -200.00) and they put $150 in your account, then GST Payable will be -50.00 because they still owe you another $50 (next time).

Makes perfect sense to me, but then again, I’m not an Accountant :wink:

Regards,

Pcal


#3

What you said is correct.

Are you concerned that your GST liability is negative? Well, one explanation could be that you have entered some purchase invoices subject to GST which you didn’t pay yet. So on accrual-basis ATO really owes you GST but since you are registered to lodge GST figures on cash-basis, those GST credits cannot be claimed until purchase invoices are paid.