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Balancing GST Reconciliation account due to Subcontractor Payments

Clinton_ELA

We has two Subcontractors set up in Payroll which was pay monthly a fixed amount, plus Super and GST.

The full payment happens through Payroll including the GST amounts.

The GST amounts are linked to 2-3030 GST Paid and the value is shown there in the GL report.

However, the values do not show in the "GST [Detail - Cash]" or "GST [Detail - Accrual]" reports.

This is causing my Tax Reconcilliation report to be out of balance to my GL report for the same period.

How can I get them to balance?

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Accepted answers

CloverQ

Hi @Clinton_ELA

For that you do need to speak with your accounting adviser to discuss the best option/timing to fix it. Until it's resolved, your GST reports of that period will not reflect the GST amounts paid to your sub-contractors.

You may consider recording journal entries (under your accountant's advise) to reverse the total GST paid so far, then re-record it correctly as a GST only transaction using the guide I linked above.

I hope this helps.

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Clinton_ELA

Hi Clover

Thanks for the reply.

Deleting the transactions and re-entering will cause alot of issues inside my Payroll and with the STP reporting etc.

Moving forward we plan to change the way the amounts are captured, but I need to find a different solution to balancing the accounts.

Because we are nearing the end of the FY, can I leave the out of balance Reconciliation account to be cleaned out at the roll over?

CloverQ

Hi @Clinton_ELA

The GST reports pull figures from amounts allocated via tax codes only, any transactions posting to the tax code's linked account directly will cause the tax reconciliation report to be out of balance. In your case, the GST amount paid via Payroll was allocated to the GST linked account directly, it was not recorded via the GST tax code, thus causing the out of balance.

I'd suggest going through this Help page which explains it with more details - Out of balance in Tax/GST Information Reconciliation reports. The suggested solution would be deleting the transactions posting to the linked account directly then re-enter them correctly, if this is not applicable for you, I'd suggest speaking with your accountant for alternative ways of fixing the past figures (there is a way to enter GST only transactions - Non-standard GST amounts), and a better set up for recording GST paid going forward.