Complete your GST Reconciliation report with a conversion balance
Running your GST Reconciliation when your organisation has a GST conversion balance.
Step 1: Publish your BAS for the period before your conversion date
Run and publish your Business Activity Statement (BAS), or finalise your activity statement if you use Simpler BAS, for all periods prior to your conversion date that contain transactions with GST. For example, if your conversion date is July 2016, and you had unpaid invoices or bills dating back to February 2016, you'd publish activity statements for the quarters 1 January to 31 March 2016 and 1 April to 30 June 2016.
You only need to publish the BAS in Xero so your GST Reconciliation report is correct. These BAS may not match the BAS you lodged with the ATO. Refer to your previous accounting system for full details of your BAS for these periods.
Step 2: Run the GST Reconciliation report to check conversion balances
Run the GST Reconciliation report for a date range that captures all the GST entered prior to your conversion date. Staying with the previous example, this would mean running the report from 1 January 2016 to 30 June 2016.
Comparative balances can affect the GST account too. If you entered comparative balances for the 2015 year, you'd run the report from 1 April 2015 instead.
If you use the Simpler BAS reporting method, you'll need to manually enter the figures in the Filed column. Use the amounts from 1A and 1B of your finalised activity statements.
Review the GST Reconciliation report and confirm the GST Account Summary balance and the GST Account Balance match. Both balances should equal your conversion balance for GST. Any Unfiled GST represents a rounding balance.
If the balances don't match in your report, review your conversion balances, and invoices and bills outstanding on your conversion date. Re-enter them if necessary.
(Optional) When you've confirmed your GST Reconciliation report is correct, publish it.
Step 3: Complete the BAS after your first quarter in Xero
Step 4: Run your second GST Reconciliation report
Run the GST Reconciliation report using the same start date as before, but this time extend the end date to the end of the first GST period you completed in Xero. Review the following details in your report:
- Check the Filed amounts for GST Collected and GST Paid agree with your BAS. The Filed column needs to be manually updated if you use the Simpler BAS reporting method.
- Check the transactions listed in GST Account Transactions are correct.
- Check the GST Owing section is correct and the GST Owing Closing Balance matches the GST to pay or refund on your BAS. You'll need to allow for rounding and any previous liabilities not yet paid.
Check the GST Account Summary balance and the GST Account Balance match. Any Unfiled GST represents a rounding balance.
When you've confirmed your GST Reconciliation report is correct, you may like to publish it.