Home – New Forums Money matters New Business – First Invoice question and advice

  • This topic is empty.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
  • #988152
    • Total posts: 9

    Hi guys!

    Hope you are all well. I have recently (in the past few weeks!) set up a Pty Ltd, registered for GST and I’m currently half way through my first invoice to a client. When I first set it up – it was as a sole trader, but on the advice of my accountant, went down the Pty Ltd road and registered for GST.

    I am currently giving Xero a go – all good so far, but I have come to realise that I need a brush up on my basic accounting / bookkeeping skills.

    First question is – Can anyone recommend any short course on the basics of bookkeeping for business?

    Second is – relating to the invoice I am currently doing.

    I have several line items for services provided, thats fine. GST and all that is included. When I did the work, there was an expense of $803 inc GST that was put on my personal credit card (as mentioned, this has all happened quite quickly and the work came in before I had everything set up, purchase made prior to Pty Ltd registration and GST registration and even having a bank account set up!).

    When I put it on the invoice so I am reimbursed for that cost, am I right in saying that it should be entered in, and GST on expense selected as opposed to GST on income (for those familiar with Xero!).

    Many thanks and I look forward to asking more questions and hopefully offering some advice where I can.



    • Total posts: 82

    Hi Melissa

    There are some great short courses (half and one day) run by TAFE which are often geared to small business owners etc.


    I’m not too familiar with Xero so I might leave your second question up to one of the resident experts.



    • Total posts: 97

    Hi Melissa,

    Good question re the invoice, but you’ll actually put it through as “GST on Income”.

    When you add the expense into Xero (which you’ll usually do directly from the Bank Reconciliation screen), that transaction will have GST on Expenses, but on the invoice, you are actually passing on the GST to the client, so you’re charging it on that transaction (ie, charging GST on Income). The two transactions will effectively cancel each other out.

    “GST on Income” is for when you’re charging the client GST. “GST on Expenses” is when you’re paying GST to another business. So although you have been charged GST on your $803 purchase, on the invoice is where you’re on-charging it to the client.

    I hope that makes sense.



    • Total posts: 1,815

    Melissa – I use Xero myself but I am no expert. However, Xero automatically adds and deducts from the one GST Account. It’s how you set up your accounts. Xero has a great help and learning area you can access when you are logged in and they have plenty of examples. Also, if you email a question they answer within 24 hours, sometimes much earlier. When you do your reports you will see how the GST balances out.

    There are a few Xero experts here on FS – you could ask one of them or Al to help set up your file if you need to.

    I found that once setting up everything the way I found easiest with ‘rules’ for regular expenses, made accounting so much faster.
    It’s worth persisting.


Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.