Home – New Forums Money matters How to account for a GST Refund in CFM

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  • #979586
    arkon
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    Hi all, My first post, I’ve searched and can’t find an answer to this.

    I use Cashflow Manager to keep my accounts, I’m just doing the end of year stuff and noticed some strange income in my P/L report. On closer inspection the extra ‘income’ was in the sundary non gst receipts catagory and were for a GST refund from the ATO and another for a Rent bond refund.

    How should I account for these? Neither were actual income but a refund in my favour. Thanks in advance.

    #1115425
    Earthmover
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    arkon, post: 129490 wrote:
    Hi all, My first post, I’ve searched and can’t find an answer to this.

    I use Cashflow Manager to keep my accounts, I’m just doing the end of year stuff and noticed some strange income in my P/L report. On closer inspection the extra ‘income’ was in the sundary non gst receipts catagory and were for a GST refund from the ATO and another for a Rent bond refund.

    How should I account for these? Neither were actual income but a refund in my favour. Thanks in advance.

    First off, i’m in no way an accountant so this may be completely wrong. but i also use CFM for my business.

    It seems to be in the correct columns and is there so your bank rec matches. Everything needs to be accounted for that goes in and out of the account.

    You can select an option to stop the sundry column from appearing in your P&L. this will give you a more accurate view of your earnings. Try also using the trail balance report.

    #1115426
    MyGreatIdea
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    Your refund should not be recorded under ANY income account.

    It needs to go against your GST accrual account. I don’t know CFM but all accounting systems are basically the same.

    You should have a GST account in your Liabilities (or it could be two accounts – one GST Received and one GST Paid) which builds through each quarter with your purchases and sales.

    If you make a payment to the ATO in your BAS, then the payment goes against the GST account. If you receive a refund from the ATO in your BAS, then the refund goes against the GST account. The idea is that the balance of this GST account is a reflection of what you owe or is owed to you by the ATO.

    Hope this helps.

    Wendy :)
    PS doing it this way keeps the GST out of your Profit & Loss, and in your Balance Sheet where it belongs

    #1115427
    EmbalmSkincare
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    How funny, just spoke to my accountant about the same thing today.

    Wendy, if I was to get a refund of GST for 2011/2012 and I was to put it towards GST Received, wouldn’t that be the same account I’m using to collect GST when I make a sale?
    Cause I’m thinking the GST I’m getting back from the ATO will be mine. Won’t it?

    Thank you!

    Regards,
    Mel

    #1115428
    MyGreatIdea
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    If you only have one GST account where both received and paid are combined, then refunds and payments go into, and get paid out of, that one GST account.

    If you have both a GST Received and GST Paid account then you apportion the payment or refund accordingly.

    For example, you received $1000 in GST on your sales, but paid out $750 to suppliers. Your payment would be coded as $1000 to GST Received, then a second line of -$750 to GST Paid, giving a payment amount of $250 to the ATO.

    If you only received $600 in GST on your sales, but paid out $800 in GST to your suppliers, then the refund would be credited as $800 to GST Paid and a second line of -$600 to GST Received, giving a refund amount of $200 from the ATO.

    Basically, with the two accounts, you just use the amounts you have shown on your BAS against each one – and allocate them accordingly.

    Always remember that GST is never yours. You’re only collecting or paying it on behalf of the government.

    Wendy :)

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