GST How to upgrade successfullyAn overview of the GST Upgrading issuesTrouble shooting GST issues

Will the GST issues we have in 08/10 be fixed by upgrading to 09/10?NO!

Will my GST upgrade correctly when upgrading from 07/08 to 09/10?

No!

So lets look at how we can make sure GST does upgrade correctly.

Upgrading GST to 08/09 and 09/10Checks & Changes to make in 07/08

Default Tax CodeEnsure a Default Tax Code has been allocated in preferences

Tax lines Tax lines are correctly assigned

Z-CodesZ-Codes only on income transactions. Especially if Zero rated sales are used.

Sales Tax PayableIf possible merge any transactions and delete this account

Inland Revenue SupplierAssign all GST payments & refunds to the one name

Tax reportsPrint ALL GST reports at the same date and keep in Excel to check after

upgrade.

Please always refer to your GST upgrade notes. These are also in every upgrade, subscription and media kit box printed on pink paper!

Default Tax Code

• Ensure a Default Tax Code has been allocated

• This should be set to ‘S’ (Edit Preferences Tax Company Preferences)

Tax Lines

• Ensure all Tax Codes have the correct Tax Type• They should appear as below. If these are incorrect they

must be changed. (Lists Tax Codes List)• S Goods & Services Tax• E GST Free• N GST Free• Z GST Free• I GST Free

Z Codes• Ensure there are no ‘Z’Codes assigned to any expense

transactions

• ‘Z’ Codes should only be used on zero rated sales.

• ‘E’ Codes should be used on exempt expenses.

Sales Tax Payable

• Earlier versions of QuickBooks (eg version 6 ) had a sales tax code.

• Make sure that ALL tax codes are assigned to the tax return line Goods & Services Tax or GST Free (as above) NOT Sales Tax.

Inland Revenue Supplier• Ensure that there is only one ‘Inland Revenue Office’ name in

the supplier list.

• During the upgrade process, all GST portions of historical transactions get assigned to a new supplier in the 08/09 version called ‘Inland Revenue Department’. This is then also enabled as a ‘Tax Agent’ in 08/09 which is further linked to the Tax Payable account used for your GST. If you have set up other suppliers names and used the wording Inland Revenue more than one name in your supplier list in an earlier version (i.e. Inland Revenue and Inland Revenue Dept) for your GST refunds and payments, it can cause problems in the upgrade.

• We suggest you rename these suppliers. Eg IRD PAYE, IRD Terminal Tax etc.

Upgrading GST Checks & Changes after upgrade to 08/09

Default Tax Code

Tax Items and Codes

Sales Tax Payable

Inland Revenue Supplier.

Tax Reports

Please always refer to your GST upgrade notes. These are also in every upgrade, subscription and media kit box printed on pink paper!

Default Tax Code

• Re-Allocate the Default Tax Code

• This should be set to ‘S’ (Edit Preferences Tax Company Preferences)

Tax Items

Tax Codes

Sales Tax Payable• If this account exists on the Balance Sheet AFTER upgrade

then…

• A) Delete it

• B) If you can’t delete it because there are transactions assigned to it, Journal out the old balance and then make the account innactive.

• C) You may still need to filter the 101 report so that it points to ‘Tax Payable and not ‘Sales Tax Payable’

Inland Revenue Supplier

• Your supplier centre should just have one Inland Revenue Department supplier name. The balance with this name should reflect the balance outstanding in the IRD department for your GST at the current date. (provided you reconcile your GST)

Tax Reports

• Compare the same reports you printed (or exported to Excel) prior to the upgrade with the reports being produced by QuickBooks after the upgrade. Ensure you are using the same date range as before.

• GST 101 • GST Summary Report• GST Detail Report • Tax Code Exception Report

Note: If any of these reports DO NOT balance, do not start working with the file until they do.

Overview of GST Issues• If the GST upgrade notes have not been followed there is a

good chance that one of more of the following issues will be present in the upgraded 0809 file.

• 1) The balance on Inland Revenue Supplier is not correct• 2) The GST detail and GST Summary report balance but the

GST 101 report is different.• 3) Customs ‘I’ transactions do not show on the 101 report.• 4) ‘Z’ expense transactions are showing on the 101 report.• 5) The GST detail and GST summary report are OK but there

is no 101 report

Lets now go and look at how we can fix up these

issues…

• No amounts on the 101 report. (Ths could be because the report is pointing to Sales tax payable and not Tax Payable account)

Make sure the file is in SP3. Filter the report to tell it to report to the Tax Payable account (and not Sales Tax Payable if it is on the COA)

• If this does not fix the issue, contact Tech Support.

More than one Inland Revenue Supplier and the balance showing in Supplier list is not the correct balance outstanding.

• Can the transactions in the Inland Revenue supplier that is not the ‘Tax Agent’ be changed to the supplier that is (ie there are not 1000’s)? If they can, suggest they take all transactions out of this name and delete it. Normally these transactions will be for GST payments and refunds and any other IRD payments (ie Provisional Tax, Terminal Tax, PAYE)

If they can’t or the client doesn’t want to change them, just tell not to use the balance on the supplier list as the balance O/S. They will need to use the balance on the Balance Sheet or the Tax account register

Tax codes and lines not assigned correctly in a new 08/09 file

• Import the taxitemsnz.iif file

E & N tax codes coming through on the 101 report.• Ie: the GST amount x 9 does not equal the Total

expenses amount.

• Upgrade to SP3.

Z tax codes coming through on the 101 report.

• Ie: the GST amount x 9 does not equal the Total expenses amount.

• Upgrade to SP3. If expenses are still incorrect you will have expenses assigned to a Z code instead of E code, you will need to change these.

GST and negative lines on bills

• There is no fix to this yet

• Australia are looking into this.

Negative lines used on Invoices GST reporting is incorrect.

This is something that development is working on at the moment.

• Fix• ALL historical transactions would have to be changed, if

historical GST reports in QB’s are to be correct. • A fix going forward is:• 1)Set up a ‘deposit in advance item’ as an ‘other type’• 2)Use a discount item to show a reduction on an invoice

rather than a service or stock item with minus amount. Ie for the amount previously taken as a deposit.

Use for the initial deposit

Use to show the deposit previously paid on the final invoice

Questions to ask customers with GST issues in 08/09 file.

• What Service pack are they on? (check CTRL 1) Should be on SP3

• Did they follow the GST upgrade notes?

• What version did they upgrade 08/09 from (check CTRL 1) If the original file was 7.5 the tax lines would be different and may not have been changed when at the 0708 stage before upgrade.