Changing GST Accounting Basis following a conversion

Changing GST Accounting Basis following a conversion

Changing GST Accounting Basis following a conversion

Changing your GST Accounting basis at any time, be it post conversion or some time in the future, will have an impact on the GST history. For example, with moving from Cash to Accrual all the transactions once flagged at Payment/Receipt for BAS reporting will now be ignored and reorganised to have GST recognised at invoice date. Past GST remittances will not longer match and balance. There will be no impact moving forward.

The source accounting software

Quite often what you are converting from allows reporting for GST to be either CASH or ACCRUAL irrespective of how the company has been set up.

For example, in Australia, unless the BAS is being produced from that accounting sofwtare, there is no impact to the accounts or reports using either method.

Xero

Xero is more obvious with reporting and transaction treatment, so on conversion it is more noticeable if the setup was incorrect in MYOB.

Possible Implications are if the accounting method is changed either way then past BAS reconciliations will no longer be valid or in balance. There will be now un-filed amounts in the GST Reconciliation Report. Entries will need to be made to compensate for the reorganisation of the GST period allocations.




Our conversions will replicate the source accounting software accounting method. If a change is required then we recommend that you make this change to your file/entity prior to sending to us for conversion. 

Conversion Adjustments to Compensate

At Jet Convert we have developed a methodology for checking and treating GST tax components when bringing transactions across from the source file to Xero. To compensate for the differences between the two software platforms, we enter adjusting transactions and lines using our conversion Clearing Accounts during the conversion process.

If you do a conversion with us transactions should not be added to or removed from these accounts without first checking as this may have impact on Conversion Balances.


Managing GST

As you can see GST treatments differences between the source accounting software and Xero can cause data disruption and potential confusion on the part of you / your client.

Our aim is to have the GST data in the best shape possible for you / your client to work with.

More information on GST treatment differences between  the source software and Xero can be found in our blog post GST MYOB Vs Xero and the Reality.

Warning, unless you understand the full accounting implication of the above steps there is a very high chance that the integrity of the data may be impacted by changes you make in the Xero organisation. This may not surface until sometime later and could result in major rework required.

    • Related Articles

    • Check Your Accounting Basis

      We create a Xero organisation based on Accounting Basis in your source file. It is recommended that you check this and correct if necessary prior to uploading the source file to us for conversion. NOTE: for Australia Accounting Basis this should be ...

    • Changing Accounting Basis in Xero Post Conversion

      Changing Accounting Basis in Xero Post Conversion Table of contents Warning: We recommend that you do not use the file until it has been corrected. Unless you understand the full accounting implication of the above steps there is a very high chance ...

    • GST Reconciliation Post Conversion

      Publish your BAS for the period before your conversion date Run and publish the older BAS, or finalise the new Activity Statement for all periods prior to your conversion date that contain transactions with GST. You’ll need to do this in Xero so your ...

    • GST System Differences

      There are a number of differences in regards to GST handling that you need to be aware of when moving from one accounting package to another. These can impact you regardless of whether you are converting over yourself or using our conversion service. ...

    • Post Conversion Queries

      Amending Conversion Balances Please see here for more information on how to Amend Conversion Balances Figures in Conversion Clearing Account Please see here for more information regarding conversion clearing accounts. Why do I have a Reconciliation ...