Claiming the GST on Inventory prepayment in previous period

Hi. I made a prepayment to a supplier for inventory before EOFY, and put it to an expense category account (without any GST) so it is on my P&L for tax purposes. Now I have the invoices for the goods that have arrived and want to claim the GST, but don't know how to enter them. Some of the help files say I should create an "Other Current asset" account (name it Prepaid Inventory) but if I do that then I can't claim the prepayment in the previous year as it won't show on the P&L. I am on Cash basis accounting and work in Hosted online program. Any assistance would be appreciated.

Answers

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited September 2023

    Hi Lyndel

    Are you on Cash or Accrual (Non-Cash) for GST (BAS) ?

    On a Cash basis, Bill Payments - & any GST - will only report when they are allocated against a Bill. Cheques will report on either basis though.

    You either need to include the NCG tax code in the original payment or enter a Bill & apply the pre-payment to it.

    I enter a Chq to Accounts Payable (NO tax code) as this shows as a Bill Credit for allocation in Pay Bills - This claims the GST on the prepayment & still leaves the remaining Bill balance payable ☺️

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    [email protected]

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • Lyndel Small
    Lyndel Small Member Posts: 5

    HI Shaz

    I'm on a cash basis for GST. I used write a chq but no tax code.... allocated it to an "item" in expenses for P&L. If i put to accounts payable it will disappear from P&L won't it?

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited September 2023

    Hi Lyndel

    You need to have a Bill entered for it & apply the pre-payment (Credit) to it, then it will pick up the applicable pre-payment amount of GST & the net pre-payment amount will be on the P&L 😁

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    [email protected]

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)