Things to check when completing your GST Reconciliation report on the cash basis

Review these items when you're balancing your GST Reconciliation report on the cash basis for GST.

Have the report columns been filled in?

If you're using Full BAS

The GST Reconciliation report only displays data in the Adjustments and Filed columns from published BAS.

To check your BAS is published:

  1. In the Reports menu, select All Reports.
  2. On the Published tab, check your BAS for the period is listed.

If your BAS is not listed:

  1. Select the Drafts tab.
  2. Click the draft BAS to open it. If there isn't a draft BAS, run a new one.
  3. When you've reviewed it, click Publish.

If you're using Simpler BAS

If you're using the Simpler BAS reporting method, Xero doesn't populate the Filed column for you. You'll need to copy in these amounts from 1A and 1B of your finalised activity statements.

Is the conversion balance of your GST account correct?

If you've converted to Xero from another accounting system, ensure your conversion balance for GST is correct. Enter the GST amount in your conversion balances on the accruals basis, even if you're on the cash basis for GST.

Check you've entered all invoices and bills outstanding at conversion date correctly in Xero.

Conversion balances: invoices and bills

Are the opening balances on your GST Reconciliation report set to 0?

We recommend you always set the From date on your GST Reconciliation report as the start of the first period containing GST. This means that your opening balances will be 0.

See our worked examples for guidance:

Complete your GST Reconciliation report with a conversion balance

You can also run the GST Reconciliation report for a specified period. You'll need to export the report and make some adjustments to balance it.

Review transactions in the GST Account Transactions section

If there are any transactions in the GST Account Transactions section of the report, check with your accountant or bookkeeper that you've coded them correctly. Normally, the only transactions you should see in this section are:

  • Your GST conversion balance (if any)
  • A trial balance adjustment (if you entered comparative balances with your conversion balance)
  • Payments to and refunds from the ATO
  • GST on import purchases

Image showing GST account transactions September quarter.

Have you coded manual journals correctly for GST?

A permanent difference can occur if a manual journal is posted that affects GST but the Show journal on cash basis reports option is not selected.

Show journal on cash basis reports

To locate the cause of the difference:

  1. Run the GST Reconciliation Report for prior periods until you find the first GST period the difference occurs in.
  2. Run an Account Transaction report for the GST account, for the GST period the difference first occurred in. Export the report to Microsoft Excel.
  3. Search the report for manual journals.
  4. In Xero, open the manual journals and see if any were posted on accruals basis only. These manual journals will be causing the permanent difference.

Have you made a payment on a future-dated invoice, or received a payment on a future-dated bill?

A timing difference occurs if you make or receive a payment in the current GST period for an invoice or bill dated in a future GST period.

For example, you receive a deposit in June but when reconciling the bank it is applied to an invoice dated July. The GST for the invoice will be included in the June BAS, however it won't be included in the accruals GST Account Balance on the GST Reconciliation report until July. The timing difference will resolve itself when the GST Reconciliation report includes July.

Have you accounted for manual adjustments on your BAS?

If you've made a manual adjustment to your BAS, make sure you process the transaction in Xero. Talk to your accountant or bookkeeper if you're not sure how to enter it.