Bad Debt - Profit and Loss and Tax Liability Report not balanced

KirstyD

Hi,

I have $2030.10 (all debt is FRE) sitting in the bad account from Jan 2021. This was to clear some invoices which weren't paid.

I have entered the bad debt account as mentioned in other posts but my profit and loss and tax liability report are still out by this amount.

My sales on Tax Liability report are showing $2030.10 LESS THAN my Profit and Loss income.

Any help would be appreciated to get this to match.

Acctd4

This suggests that although you've coded the bad debt transaction as FRE, the original sale wasn't (eg sale was coded as GST)! 

The bad debt entry needs to be an exact match of the original (in reverse) in order to clear/offset the multiple components (income/GST) correctly

KirstyD

Thank you for your response. The original sale was definitely FRE. No GST was applied.

Could it be that the bad debt adjustment note was made in a different quarter than the original invoice which was generated?

If so, how do we balance this?

Thanks

Kirsty

Acctd4

Have you “applied” the Adj Note to the invoice? If the adj note is dated in a different period, that will (correctly) be the case.

It may be that your default financial reports are set to a different basis than your tax reports. Try running all reports on the same basis (eg all “Accrual” or all “Cash”)

KirstyD

As the adjustment notice is dated in a different period this must be the reason why it doesn't balance. would you agree?

how do I balance the sales for that period before I lodge BAS? or do I just enter the total sales from the Tax Liability Report rather the Profit and Loss into my BAS sheet?

Thanks

Kirsty

Kris_Williams

Always use tax summary report or tax liability- my preference is the tax summary though. Unless you’re on accrual basis the figures from P & L will mostly disagree with tax reports

Acctd4

Always use the Tax Reports for BASs.

IMPORTANT: Be mindful of the reporting basis (eg Cash or Accrual) & also your default GST display setting (Net or Gross) & ensure your RAH reports & BAS reporting matches!