GST REPORTING ON A DEPOSIT

Jenny Byrne

We have received a significant deposit for work to be commenced in April 2021. I do not want to pay the GST this quarter because we have not done any work. How do I show this in Reckon Hosted without the GST component showing in this quarters GST report

Kris_Williams

I could be wrong but I believe the onus is on you to pay the GST on the deposit even if the work has not been started, as you have received the money

Jenny Byrne

I thought that was if we worked on a cash basis. I use the accrual system

Kris_Williams

Either way you have received the money and have to account for it on the correct date. Wait for someone else to offer some advice to be sure

Jenny Byrne

Because it was a deposit for work yet to be done I thought I could place it somewhere else in Reckon other thatn 4200 so the gst did not show until next quarter

Kris_Williams

You can do whatever you need to in Reckon, show it in an offset account, E.g. Contra, and then journal it out later, but that’s not to say it’s correct. Creative bookkeeping!

Jenny Byrne

Thanks Kris. Will leave it to the accountant

Linda ABC

Kris is correct, unless the deposit is refundable if the work doesn't proceed.. if that's the case then you could create an other current liability called Deposits Received and put the payment there...

At the point that either the work commences or the deposit becomes non refundable.. you could then raise a tax invoice to record the gst and create a payment item called Less Deposits Received and point this to the liability account created above ... this will then reduce the invoice balance by the amount of the prebipus deposit.

Cheers Linda