Wednesday, April 1, 16:40:30 2015

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How EziAccounts treats GST

EziAccounts first line of code was written in 1998 in response to the fear surrounding the 'Millenium Bug'. It stepped up a gear when the Howard Government proposed introducing a Goods & Service Tax (GST). The software developer decided to attempt to design a system that would be responsive to user's needs and create a better, easier system.

The developer decided that he would build in the capacity to manage GST recording in the system. With the discussion around how it would work and what rate to charge, he decided to build in the flexibility to have different rates of tax that could be altered if the government decided to change the rate.

How EziAccounts treats GST and the potential change to the 'Tax Rate', is to record the applicable tax rate for every transaction into the database. In this way, if the GST tax rate changes, it will not impact on the previous transaction history. While still having the full transaction history available for review without the requirement to 'close-off' previous Financial Years transactions.

EziAccounts also allows you to have as many tax rates as you require. If the government decides to introduce scaled GST rates, EziAccounts already has the capacity to manage how the different tax rates can be applied.

The recorded GST for all transactions process through a control account, '2-1301', in the Chart of Accounts. This allows for entries to display on the 'Debit' or 'Credit' side as appropriate and makes tracing errors much easier.

As the entries are recorded, they are also allocated in preparation for the BAS submission. Please see the blog in the BAS category for more information.

If a mistake is made in allocating GST in a transaction, all transactions can be edited through the 'Ledger Editing' tool.



Posted by eziaccounts.com.au