Run the GST Reconciliation report for a specified period
Run the GST Reconciliation report for one or more GST periods. You'll need to export the report to Microsoft Excel or Google Sheets and adjust some figures before you can balance it.
Before you start
- Check you've run the GST Returns for all periods up to and including the period of the GST Reconciliation report you want to run.
- Confirm the GST returns are saved as Final.
Run the Balance Sheet report as at the start of the GST period you want to reconcile. Run this report on the same basis you report GST. For example, if you want to run your GST Reconciliation report for the period 1 June to 30 September 2015 and you report GST on the payments basis, run your Balance Sheet report on the cash basis as at 31 May 2015.
You'll need the GST account balance from your Balance Sheet report when you make your adjustments.
Run and export your GST Reconciliation report
- In the Reports menu, select All Reports.
- Under the Tax heading, click GST Reconciliation.
- Change the From and To dates, then click Update.
- Enter the Filed amounts for GST Collected and GST Paid.
- Click Export, then select Excel.
Check your GST Owing Opening Balance
Compare the GST Owing Opening Balance figure on your exported GST Reconciliation report with the GST account balance on the balance sheet you ran.
If the amounts are:
- The same - Go to Update Unfiled GST in the GST Account Summary.
Different - Overwrite the GST Owing Opening Balance figure on your spreadsheet with the GST account figure from your balance sheet. Enter a GST liability as a positive number and an asset as a negative number.
Update Unfiled GST in the GST Account Summary
Edit the Unfiled GST amount in the GST Account Summary section of your spreadsheet to account for opening unfiled GST balances. Do this by subtracting the difference between the Opening Balances in the Unfiled column of the GST Collected and GST Paid sections.
Review further items if your payments basis reconciliation doesn't balance
If you report GST on the payments basis and your reconciliation still doesn't balance, review these further items.
Timing difference from payment applied to future-dated invoice or 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 March but when reconciling the bank it's applied to an invoice dated April. The GST for the invoice will be included in the March GST Return, however it won't be included in the accruals GST Account Balance on the GST Reconciliation report until April. The timing difference will resolve itself when the GST Reconciliation report includes April.
Permanent difference from manual journal
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.
To locate the cause of the difference:
- Run the GST Reconciliation Report for prior periods until you find the first GST period the difference occurs in.
- Run an Account Transaction report for the GST account, for the GST period the difference first occurred in. Export the report to Microsoft Excel.
- Search the report for manual journals.
- 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.