Things to check when completing your GST Reconciliation report

Review these items when you're balancing your GST Reconciliation report.

Have you completed the GST Return check?

We recommend you check these items when you complete your GST Return, before you run the GST Reconciliation report.

Things to check when completing your GST Return

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.

Check that you've entered all sales invoices, bills and expense claims outstanding at conversion date correctly in Xero.

Conversion balances: invoices and bills

Invoice basis

Xero includes these items in the conversion balance for the GST account:

  • Unpaid or unrefunded amounts on filed GST returns at conversion date
  • GST on invoices and bills outstanding at conversion date, which hasn't been included on a filed GST return yet
  • GST on approved but unpaid expense claims outstanding at conversion date, which hasn't been included in a filed GST return yet

Payments basis

Xero includes these items in the conversion balance for the GST account:

  • Unpaid or unrefunded amounts on filed GST returns at conversion date
  • GST on paid invoices, bills and other transactions, which hasn't been included in a filed GST return at conversion date

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

We recommend you set the From date on your GST Reconciliation report so that all opening balances are 0. Keep the report in draft format and update it after you publish each GST Return.

See our worked examples for guidance:

Complete your GST Reconciliation report with a conversion balance

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

(Payments basis) Is your GST Account Summary balance different from your GST Account balance?

Your GST Account Summary balance and your GST Account balance on your GST Reconciliation report won't match if you:

  • Make a payment on a bill in this GST period when the bill is dated in a later GST period
  • Receive a payment on an invoice in this GST period when the invoice is dated in a later GST period.

Image showing balance mismatch.

To adjust for this:

  1. Export your GST Reconciliation report to a Microsoft Excel spreadsheet.
  2. In the spreadsheet, insert rows under the GST Account Summary balance line.
  3. Enter the GST component of the early payment.
  4. Add or deduct the early payment GST component from the GST Account Summary balance.

Image showing adjusted balance.

Your GST Reconciliation report will correct itself at the end of the period in which your invoice or bill is dated.