GST on overpayments

Leigh-Anne
Leigh-Anne Member Posts: 1
edited December 2018 in Reckon Accounts (Desktop)

Accounts Premier 2017 - Accrual accounting - gst cash basis

When customer overpays and balance is left as credit balance for later use no gst is accounted for on overpayment amount.

Company accountant is insisting gst should be accounted for at time of receipt of money (which of course Reckon doesn't do) anybody else have this issue/found a way to deal with it?

Help much appreciated

Comments

  • Neil Hodgson_8693309
    Neil Hodgson_8693309 Member Posts: 4
    edited August 2017
    I think your accountant is wrong in this case.
    The receipt of money as an overpayment is not for a taxable supply.
    The total sum of the money received should sit against the debtor's account.
    Once that money is applied to a sale then the GST is accounted for.


  • Malcolm McMaster
    Malcolm McMaster Member Posts: 17
    edited August 2017
    I also would question your accountants view on this. An over payment represents funds the entity is (basically) holding in trust & as such is fully refundable (potentially) to your debtor, or to be used in reducing a future debt. GST is accounted for when a taxable supply transaction occurs. Find a new accountant & your problems will be solved.
  • cosmic
    cosmic Reckon Developer Partner Posts: 1,073 ✭✭✭
    edited September 2018
    So your TAX AGENT/ Accountant has sent you an email on this?
    call us if you wish to discuss , we are Tax Agents and Reckon partners for many years (19).
    May be  you should re discuss with your external accountant again.

    Cosmic Accounting Group

    Accountants and Tax Agents 22397009

  • Toni_9025747
    Toni_9025747 Member Posts: 132
    edited December 2018
    I agree, change Accountants :-) GST is payable/paid on taxable supply - an overpayment is not a taxable supply it is a liability to your business.

  • Allan Hamblin_8709759
    Allan Hamblin_8709759 Member Posts: 10
    edited August 2017
    GST is an ogre in the room. I agree with other comments, but how Reckon/QuickBooks handles it I don't know, e.g. deposited cheques without an invoice. I have/had discrepancies that I could not trace. QB does not provide for separation of BAS payments into GST and PAYG, and I think attempting to get around that has caused problems.