Complete your GST Reconciliation report after you've registered for GST

Learn how to complete your GST Reconciliation when you're a new organisation, or you've recently registered for GST after using Xero for a while. We'll use an example to show how it works.

If your organisation has moved to Xero from another accounting system, and you have a GST amount in your conversion balances, follow the process for completing the GST Reconciliation report with a conversion balance instead.

Example scenario

  • You start a new business on 1 August 2015. You're using Xero from that date.
  • You are registered for GST with Inland Revenue on the invoice basis, with a GST start date of 1 August 2015.
  • Your organisation files GST every 2 months. Your first GST Return will be for the 2 months ended 30 September 2015.

Number 1. Complete your first GST Return in Xero

Following the end of your first GST period:

  1. Complete your first GST Return in Xero
  2. Save your GST return as final
  3. Publish the return

Image showing GST return for 2 months ended 30 Sep.

Number 2. Run the GST Reconciliation report

Run your GST Reconciliation report after you publish your first GST Return, and enter the figures from your published GST Return.

  1. In the Reports menu, select All Reports.
  2. Under Tax, click GST Reconciliation.
  3. In the From date field, select the first day of your GST period.

    In this example, select 1 August 2015.

  4. In the To field, enter the last day of your GST period.

    In this example, enter 30 September 2015.

  5. Click Update.

    Image showing date fields.

  6. Check that all opening balances on the report are 0. If they are not 0, check for transactions including GST dated before your start date for GST. You'll need to edit them to remove GST.
  7. In the Filed column of the GST Collected section, enter the total GST collected from Box 10 of your GST Return.

    Image showing GST collected section.

  8. In the Filed column of the GST Paid section, enter the total GST credit from Box 14 of your GST Return.

    Image showing GST paid section.

  9. Check the GST Account Transactions are correct. This section of the report shows transactions coded directly to the GST account.

    In this example, you've imported a purchase during the period and used the tax rate 'GST on imports'.

    Image showing GST account transactions for period.

  10. Check the GST Owing closing balance matches the GST to pay or refund on your GST Return.

    Image showing GST Owing section.

  11. Check the GST Account Summary balance matches your GST to pay or refund.
  12. Check the GST Account Summary balance and the GST Account Balance match.

    Image showing Account Summary and GST Account Balance.

  13. Click Save as Draft.

Number 3. Complete your second GST Return in Xero

Following the end of your second GST period:

  1. Complete your second GST Return in Xero
  2. Save your GST return as final
  3. Publish the return

Image showing GST return to 30 Nov.

Number 4. Update your GST Reconciliation report

When you've published your second GST Return in Xero, update your GST Reconciliation report.

Note that during the second GST period you'll have paid your GST owing, or received your GST refund, for the first period.

  1. In the Reports menu, select All Reports.
  2. Click the Draft tab.
  3. Click the draft GST Reconciliation report to open it.
  4. Don't change the From date. Change the To date to the end of the GST period you've just finalised. Click Update.

    Image showing GST Rec date field.

  5. In the Filed column of the GST Collected section, enter the total GST collected from Box 10 of your GST Return.

    Image showing GST collected section.

  6. In the Filed column of the GST Paid section, enter the total GST credit from Box 14 of your GST Return.

    Image showing GST paid section.

  7. Check the GST Account Transactions are correct. This section of the report shows transactions coded directly to the GST account.

    In this example we see the payment to Inland Revenue for the first period's GST as well as 2 import purchases using the tax rate 'GST on imports'.

    Image showing GST account transactions for period.

  8. Check the GST Owing closing balance matches the GST to pay or refund on your GST Return.

    Image showing GST Owing section.

  9. Check the GST Account Summary balance matches your GST to pay or refund.
  10. Check the GST Account Summary balance and the GST Account Balance match.

    Image showing Account Summary and GST Account Balance.

  11. Click Save as Draft.

Number 5. Update the report for subsequent GST periods

Repeat Step 4 after you publish each subsequent GST Return. Save as draft to retain the figures you enter for each GST period.

You can export the report to Excel, PDF or Google Sheets at the end of each GST period to save a snapshot at that point in time.