preconversion purchases & gst

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Experienced Cover User abook
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preconversion purchases & gst

I am using accountright for the first time and transferring data from previous software with the help of the videos and forum but i am still at a loss in regards to the preconversion process. I went through the process of adding (gst & non gst amounts) balances to individual supplier cards which equalled the historical balance and thought that as soon as these balances were paid, the relevant accounts would increase and decrease, giving me the correct balance of gst to pay for my next quarter after the conversion. But after doing a few i noticed that these gst balances did not change from the original amounts even though i could see the gst amounts in the transaction record. After much searching i came across a similar problem to mine that was posted by @Kelly81 (HELP: Making payments to pre-conversion payable balance.31-03-2014 02:26 PM)  but it was in 2014 and the thread was closed, although the problem not solved because the software was apparently not developed enough to automate this sufficiently.

 

Has the process changed or the software developed enough so that gst collected and paid is changed when payments are made against preconversion creditor balances or not? There is nothing about it in any of the tutorials and that seems to be a glaring omission when we need to end up with correct figures for reports, or am I missing something glaringly obvious? Smiley Sad

 

I have been aided with other details by an old MYOB for Dummies book (which would predate the new version of accountright), but it actually says that ' if you owed money to suppliers and you report on a cash basis, add the value of GST on your outstanding accounts to your opening balances for GST paid'. I thought this would skew the figures but maybe this is the answer?

[ for example: creditor is owed $100 at 30/6/16, gst needs to be paid for only for part of this amount as it is a mixture of gst & free items, so i  generate two transactions to make this outstanding balance for preconversion. I add this gst amount to the gst paid opening balance as well. When i come to reconcile July and part of it is the amount of money that has been paid to ATO for gst (as per my BAS report before I transferred data too accountright) as well as the $100 payment to the creditor, would that mean that what is left is the amount of gst still left to pay for the next qtr, when i will have balances that will generate a BASlink amount??] I hope i have explained my problem clearly, any help, even if it shows my complete misunderstanding is much appreciated.

 

 

 

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Ultimate Partner Mike_James
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Re: preconversion purchases & gst

Hello @abook, historical purchases (and sales) are a special case, and the way they are treated applies only to the initial setup of your file.

 

"Historical" means that these transactions have taken place in an earlier period, and/or in another system, and at that time the expense/income and GST component would have been accounted for in the normal way.

 

As a historical transaction, MYOB correctly creates a journal in which all the entries are allocated to the accounts payable (for purchases) or accounts receivable (for sales) accounts in the balance sheet.

 

Depending on the basis on which you are registered for GST, you will create the appropriate GST report or return, and if on a cash/payments basis, MYOB will report the GST on any historical transactions which have been paid or received during the GST period, in addition to the GST on other transactions created post-conversion, settled during the GST period.

 

You do not need to create additional journals for the GST on historical transactions.

 

I note the comment from MYOB in the March 2014 post you refer to that "There is however the issue with payments to the Historical Sales/Purchases not being included in the Cash/Payments basis reporting for GST Returns". I will look into that to see if the fault still exists in 2016, but it MAY only refer to the GST101 return form and not the GST reports in the reports index.

 

Therefore you should be able to run the appropriate GST Payments (detail or summary) report and obtain the correct figures for your GST returns.

 

I will try to confirm that soon. If you have any questions about my answer please let me know.

 

 


Regards, Mike (mike@datawise.co.nz)
DataWise Limited (www.datawise.co.nz), developers of:
DataWise Report Writer - Custom Reporting from MYOB programs
(Including AccountRight Classic/Live, and exo Payroll)

Ultimate Partner Mike_James
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Re: preconversion purchases & gst

Hello @abook, I have tested the GST set-up and reporting on a payments basis, and can confirm that this is correctly handled in version 2016.2.

 

The following attachments show a new file with an opening creditor of $150, including $19.57 GST to claim. This bill is paid in April 2016, and the GST return form shows a refund due of $19.57 (as does the GST Payments basis report, not shown).


Regards, Mike (mike@datawise.co.nz)
DataWise Limited (www.datawise.co.nz), developers of:
DataWise Report Writer - Custom Reporting from MYOB programs
(Including AccountRight Classic/Live, and exo Payroll)

1. Pre-conversion purchase recorded.jpg
2. Account List opening balances.jpg
3. Supplier paid in GST period.jpg
4. GST Return settings.jpg
5. Extract of GST return.jpg
Experienced Cover User abook
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Re: preconversion purchases & gst

Thank you very much for your quick and comprehensive reply @Mike_James, i'm sorry but i haven't been able to get back online til now because of internet problems. Although i understand about preconversion and historical purchases etc i can still not work out what is going wrong with what i am doing.  I was sure i also did all the things you did in the initial set up but my gst accounts are not changing.  i have then tried to play around with purchases etc to see what is changing and where, and can only see that it is not working as i thought it would. i was then surprised to find that it is when a bill is generated that the 'gst paid' is adjusted, not when the bill is paid, so i can only presume the BAS report adjusts for outstanding creditor gst?  if that is the case, i would have thought that when making a preconversion purchase the 'gst paid' would change (this is what your screenshot order suggested), so I even removed the BAS figures i had put into gst paid & collected and started again with a nil balance, then added a preconversion purchase - but stil found that nothing changed.  Aaargh! what am i doing wrong!?

p.s gst reports & transaction reports show the change, as does the trade creditor account, it is only the gst liabilities that doesn't

Experienced Cover User abook
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Re: preconversion purchases & gst

Realisation: It probably is glaringly obvious:

I have upgraded from simple cashbook software (not double entry) and report GST on a cash basis. As this is a cash customers business with virtually nil debtors,  the main reason for the upgrade is to be able to track creditors and costs, so purchase invoices are recorded. As i now understand it, MYOB generates GST when invoices are recorded (as per accrual GST) so a cash GST report has to be run to report correct GST for BAS if not reporting on an accrual basis. Although I also use Quickbooks elsewhere, it is without recording purchase invoices, so the BAS report shows correct GST paid and i have never had to run different reports, so never gave it a thought.  I suspected my problem was to do with the cash/accrual GST recording (firstly I checked that the BASlink was correctly set up for cash GST reporting etc) but could not find any clear understanding anywhere here that the BASlink would show differently depending on GST choice and that the figures needed to be taken from running a GST cash report. The MYOB for Dummies book directly addressed this, as it was correct regarding adding the outstanding GST amounts for preconversion purchases directly to the GST Paid opening balance, which, if you are reporting GST on a cash basis, would not seem correct, but is the only way to start correctly if you are continuing to do so via MYOB. This may all be glaringly obvious to others new to MYOB (and/or double entry accounting) but it wasn't immediately obvious to me and @Mike_James didn't realise i missed this  understanding, although it was his comment about preconvenversion purchases being already dealt with by previous period that led me to the realisation, so thank you, but just one clear sentence stating the difference anywhere in the setup training would have made me understand this immediately.

Community Manager Suja_P
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Re: preconversion purchases & gst

Hi @abook,

 

Thank you very much for taking the time to explain your findings and the details of how you resolved your issue. Thank you also for your feedback regarding  training and help material on this topic. I have passed it on to our Technical communications team.

 

Also, a very warm welcome to our forum. I hope you continue to find our forum and help that you receive from experts like Mike (@Mike_James) to be useful.

 

Do post again should you ever need a hand again.

Cheers,
Suja Pillai

Social Support and Community Manager

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