BAS & GST Reconciliation

GST-BAS & GST Reconciliation (May 2014)

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EOY#8 - BAS and GST Reconciliation

Reconciling for Cash Basis

REVIEW • Review tax code exception report to ensure all transactions have
appropriate tax code

• Display and review GST CASH detail, ensure GST transactions can be
claimed

• Review and print debtors and creditors summary with tax report
• Large GST amounts review the invoice

• Print GST CASH summary report and balance sheet to reconcile to GST

accounts on balance sheet

• GST Collected = GST collected on balance sheet LESS debtors GST

RECONCILE (review tax on debtors report - Refer 1. and 2. Samples)
TO BALANCE • GST Paid = GST paid on Balance sheet LESS creditors GST (review tax

SHEET on creditors report - Refer 1. and 2. Samples)

RECONCILE • OPTIONAL: Use this reconciliation method if GST accounts are not
to BANK updated by accountant each year on balance sheet)

• Print GST summary report and TOTAL sales (G1) and purchases (G11)
for the BAS period

• Print trial balance to show total of movement of banks in the period
• Total Sales = money received to bank and total purchases - money spent

from bank less wages

PREPARE • Print or Save PDF of GST Detail Report for auditing purposes
AND LODGE • Prepare BAS and reconcile to GST report
• Save a copy of original BAS or Electronic Lodgement Receipt after

Lodgement of BAS

© The Institute of Certified Bookkeepers [GST/RL/BASREC5] Page 1

GST-BAS & GST Reconciliation (May 2014)

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Reconciling for Accrual Basis

REVIEW • Review Tax Code Exception report to ensure all transactions have
appropriate Tax Code

• Display and Review GST Accrual Detail, ensure GST transactions can
be claimed

• Review and print debtors and creditors summary with tax report
• Large GST amounts review the invoice

• Print GST ACCRUAL summary report and balance sheet to reconcile to
GST accounts on balance sheet

RECONCILE TO • GST Collected = GST collected on balance sheet
BALANCE • GST Paid = GST paid on balance sheet
SHEET

• (OPTIONAL: Use this reconciliation if GST accounts are not

updated by accountant each year on balance sheet)

• Print GST summary report and TOTAL sales (G1) and purchases (G11)

• Review general ledger detail report for GST collected and paid

RECONCILE TO accounts for the BAS period
GST
ACCOUNTS • Balance or movement in the GST collected and GST paid accounts
should equal GST collected and paid amounts on GST summary

PREPARE • Print or Save PDF of GST detail report for auditing purposes
AND LODGE • Prepare BAS and reconcile to GST report
• Save a copy of original BAS or electronic lodgement receipt after

lodgement of BAS

© The Institute of Certified Bookkeepers [GST/RL/BASREC5] Page 2

GST-BAS & GST Reconciliation (May 2014)

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Preparing Quarter 4 BAS

1. Review prior BAS’s for the year to ensure any changes that were made to transactions after
lodgement of the BAS are picked up and reported in this quarter. Also to re-check that no
mistakes were made.
a. Reprint/display the summary report of either CASH or ACCRUAL and compare the
reports with the lodged BAS reports for Q1, Q2 and Q3
b. Print the GST report for the whole year and compare the totals to BAS’s paid in Q1, Q2
and Q3 plus Q4. If this balances then it confirms no changes have been made to GST.
c. In no change, prepare the Q4 BAS.
d. If changed, compare the current GST report with the lodged GST report printed at time
of BAS. Recommend export the report to excel to help find the change.
e. Check the bank reconciliation screen to see if any additional transactions have been
added to prior periods.

2. Correcting mistakes in prior BAS’s is allowed by increasing or decreasing GST paid or
collected, see these links for more detail:
http://www.ato.gov.au/General/Correct-a-mistake-or-dispute-a-decision/Correct-an-instalment-
or-business-activity-statement/
http://www.ato.gov.au/Business/Bus/Making-adjustments-on-your-activity-statements/

3. Correct the mistake by manually decreasing or increasing 1A or 1B in the Q4 BAS
4. Before preparing the Q4 BAS, reconcile GST accounts as above for either cash or accrual.
5. Prepare Q4 BAS.
6. Copy all four BAS’s for Accountant (comment if any changes have been, made including

detailed GST reports to back up the BAS reports).

Correcting BAS Mistakes

Correcting mistakes in prior BAS’s is allowed by increasing or decreasing GST paid or collected, if
mistake is due to:

a. Clerical errors
b. Incorrectly recorded a taxable sale/purchase as GST-Free
c. Mistakenly classified GST-Free sale/purchase as taxable

See ATO Website on ‘Correcting GST Mistakes’
http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/13104.htm&page=3&
H3

There are NEW correction limits from 10 May 2013:

Annual turnover Correction limits* Time limits**
Less than $20m. Less than $10,000 Up to 18 months
$20m to less than $100m. Less than $20,000 Up to 12 months
$100m to less than $500m. Less than $40,000 Up to 12 months
$500m to less than $1b. Less than $80,000 Up to 12 months
$1b. and over Less than $450,000 Up to 12 months

© The Institute of Certified Bookkeepers [GST/RL/BASREC5] Page 3

GST-BAS & GST Reconciliation (May 2014)

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* These correction limits are net results of corrections

** The Time Limit applies from the lodgement due date of the original BAS period, not from

the actual lodgement date.

Correct the mistake by manually decreasing or increasing 1A or 1B in the June BAS.

Correcting GST mistakes AFTER 10 May 2013

 Within correction limits, do it on your current BAS
 Outside the limits, revise the original BAS
 For GST annual returns, amend on your next return within correction limits.
 Value limits apply only to debit errors, not credit errors. The correct term is now “Debit error

value” limit, not “correction” limit.

 Credit errors may be offset against the sum of debit errors.
 Credit errors are no longer subject to value limits.
 How the error arises is no longer relevant to credit errors
 Time limit changes: for turnover of less than $20M, the error must be corrected in an activity

statement that is lodged within 18 months of the due date of the activity statement for the
reporting period in which the error was made.

 For turnover of more than $20M, this time limit is 12 months

Example: If you are at March 2013 BAS and correcting a December 2011 BAS you can use the new
guidelines because this falls within the 18 month time limit. If you were correcting a BAS from
December 2010, you would have revise and re-lodge the BAS as it falls outside the 18 month time
limit.
If the BAS you are correcting is within 18 months of DUE DATE of the original BAS, then you can use
the new guidelines.

For more information see this link also:
http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/00352244.htm&page=2&H2

Running Balance Account (RBA) Integrated Client Accounts

RBA Statement a running balance of what the client owes to the ATO showing all charges, payments
and interest charged for that ABN entity and it is available to clients and until recently, only issued
where a General Interest Charge (GIC) was imposed and the account balance was in excess of $420
DR. After review with tax practitioners, the statement is now being issued across a broader range of
circumstances. RBA Statements can now also be viewed via the BAS Agent Portal

Bookkeeping Process

Best practice bookkeeping involves reconciling the RBA statement with the RBA Liability clearing
account established on your balance sheet To bring in General Interest Charged via the ATO, see
below journal.

Account DEBIT CREDIT
Interest Charged 120.30 120.30
RBA Liability Account

© The Institute of Certified Bookkeepers [GST/RL/BASREC5] Page 4

GST-BAS & GST Reconciliation (May 2014)

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Enter BAS Payment/Allocation

Enter the BAS payment using the full values from GST reports and allocating the rounding amounts
to a rounding account—usually set up as an expense account.

PAYMENT TO ATO – BAS JULY TO SEP 20XX—see page 4 example

ALLOCATION DEBIT CREDIT
GST Collected 773.64
GST Paid 776.50
PAYG Withholding 1,180
Rounding 0.14
TOTAL to BANK or RBA Liability Account 1,177

Troubleshooting—where to look if the reports don’t balance

 Changed transactions in previous periods, not picked up and adjusted/corrected in subsequent
BAS periods.

 Some out of balance amounts may be due to rounding—journal the amount to a rounding
account. If for example the file has been in use for many years but never reconciled, the
rounding amount might be substantial.

 Direct allocation of journals/purchases/expenses to GST control accounts—enter or edit
transactions to the correct accounts.

© The Institute of Certified Bookkeepers [GST/RL/BASREC5] Page 5

GST-BAS & GST Reconciliation (May 2014)

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 Changing the amount of GST calculated by software—check these adjustments and if
necessary allocate difference to rounding account.
 Incorrectly linked accounts.
 Changed linked accounts partway through a reporting period.
 Negative amounts on tax summary reports—for example for No ABN Withheld or Voluntary
Withholding amount. These amounts are accounted for on a CASH basis only and reported
when payment is made.
 Make sure they have recognised payment breakup correctly: PAYG (4), Fuel Tax Credits (7a
or 7b), PAYG Income tax instalments (5a or 5b), WEG/WET. Check that these amounts have
been distributed to their correct balance sheet accounts

Related ICB References:

http://www.icb.org.au/Resources/GST--BAS/EOY-and-BAS-errors
http://www.icb.org.au/Resources/GST--BAS/BAS-Reconciliation-Process
http://www.icb.org.au/Resources/End-of-Year

Related Software Help References:

http://myobaustralia.custhelp.com/app/answers/detail/a_id/33132
http://myobaustralia.custhelp.com/app/answers/detail/a_id/10463
http://myobaustralia.custhelp.com/app/answers/detail/a_id/9209
http://help.xero.com/Help/howto/Q_GSTRec.htm
http://help.xero.com/Help/AU/Report_BAS.htm
https://community.xero.com/business/
http://help.saasu.com/tax/australia/
http://blog.saasu.com/
https://qbouk.custhelp.com/app/answers/detail/a_id/5411/kw/GST/r_id/104113
https://qbouk.custhelp.com/app/answers/detail/a_id/5799/kw/BAS/r_id/104113
http://www.quickbookshelp.com.au/forum/
http://www.reckonhelp.com.au/Help_RAB.htm

© The Institute of Certified Bookkeepers [GST/RL/BASREC5] Page 6