ANSWER ID: 9285, 2947
Here are the common causes of an "Out of Balance" in the Tax/GST Information Reconciliation report.
If the report is filtered for the next reporting period, the Actual Account Balance will include the forwarding balance from the previous period. This causes the activity of the tax/GST code linked account to appear overstated when compared to the Expected Account Balance. As a result, an out of balance is reported.
If the out of balance amount is equal to the forwarding balance (payment) from the previous period, you can ignore it.
If the activity of a tax/GST code linked account consists of amounts allocated to it via a tax/GST code only, then the Actual Account Balance of that account must equal that tax/GST code's activity Total. Additional transactions that are directly allocated to a tax/GST code linked account will affect that account's activity. These introduced amounts will be reflected in the Actual Account Balance which will no longer equal the Expected Account Balance.
With the exception of recording your payment to or refund to the ATO/IRD, you should not allocate transactions directly to the GST Collected or GST Paid accounts.
To fix: Reverse the transaction and re-record it using the correct allocation account.
Check the account opening balances by going to Setup > Balances > Account Opening Balances.
To check if an opening balance has been changed
- Restore a backup of your company file that you know has the correct opening balances.
- In the restored company file, take note of the opening balances.
- Correct the opening balances in your current working company file.
If a tax/GST code's linked account has been changed, and that change is within the report's period, the tax/GST code's entire activity for that period is reported against the account it is currently linked to. As only a portion of the tax/GST code's activity was actually posted to its current linked account, an out of balance for the account will be reported.
To check if a linked account has been changed:
- Restore a backup of your company file from when your tax/GST was last reported.
- In the restored company file, run the Tax/GST Code List report.
- Click Customise and click the Report Filters tab.
- Select the Tax/GST Collected and Tax/GST Paid columns to include them in your report. This will display the linked accounts for each tax code.
- Print the report and compare it with the same report produced from your current working company file. This will identify any tax/GST codes that have had their linked accounts changed. If this account has been changed:
- change it back to the correct linked account
determine the GST value of transactions which have been recorded while the wrong linked account was set (this is likely to be your out of balance amount)
record a journal entry to transfer this value from the wrong linked account to the correct linked account.