Re Handling GST & PST from Credit Card transactions

[Derrick Ashby]

Doctorcam wrote:

>* Derrick Ashby (daeroncs at fastmail.fm) wrote:
>  
>
>>Russell,
>>
>>I agree that GST is a bit of a pain in gnucash, but it is do-able.  You 
>>have to create the split transaction yourself.  This is easy if you 
>>regularly deal with only a few vendors, since gnucash defaults to the 
>>last transaction you did with the same description.  You then only need 
>>to balance each transaction where the amounts are different.  I 
>>personally use a little spreadsheet to calculate the GST / Ex GST split, 
>>not having previously twigged to the fact that gnucash accepted formulas 
>>in amount fields.  If you desperately need to capture vendor information 
>>other than via the description line, I guess you could create a 
>>subaccount for each vendor, although that could become a pain if you 
>>also have lots of expenses accounts. 
>>
>>From a business point of view, if you are claiming GST back from the 
>>government, don't listen to the people who tell you that it goes in a 
>>Liability account.  Claimable GST is an asset.  Non-Claimable GST is an 
>>expense.  GST paid to you by a customer is a Liability, because it's not 
>>your money - it's the government's.
>>    
>>
>
>Of course it's an Asset.  However, you need to know how much you
>actually owe.  When you set it up as a contra Liability subaccount, at
>the same level as the GST you charge, the parent account gives you the
>net, without your having to calculate it.  Any GST my business pays out is
>claimable - that may not be the same in Australia.
>  
>
Sorry, I left that out. Until I thought about it some more this 
afternoon GST Payable was an Expense account, which I set up as a 
subaccount of Tax Expenses. At the end of the payment period (quarterly, 
in our case), I intended to post the GST Claimable balance and the GST 
Collected balance to GST Payable, which automatically gave me the 
balance that I needed to pay the government. A little extra work, I 
grant you. I have now realised that sending a cheque to the government 
would in fact zero that expense account (duh!), which makes no sense. 
Therefore the GST Payable account properly becomes a Liability account. 
When you think about it, GST is not really an expense, because it's 
money that wasn't yours in the first place.

>  
>  
>
>>Down here in Australia we are able to use cash accounting, so I in fact 
>>have two GST Liability accounts - GST Collected and GST Receivable.  GST 
>>Receivable is the GST that I am required to collect once the invoice 
>>gets paid (this is processed automatically by gnucash), and GST 
>>Collected is the money that has actually been collected.  This requires 
>>me to remember to do a transfer from the one to the other when I process 
>>a payment.
>>
Having modelled several different schemes in a dummy gnucash file, I 
confess that your model works just as well as mine, but I think mine is 
a more accurate picture of what goes on (okay, I prefer mine...). It 
also has the advantage of zeroing all the GST liability accounts at the 
end of each period, whereas with your method the balance in the 
subaccounts will continually grow.

>We cannot - once it's invoiced, it belongs to the government, though
>they allow you to pay at specified intervals (quarterly, in my case).
>Simpler, fortunately, but a drag if the customer doesn't pay up in
>time. 
>
>Cheers
>
>Cam
>
>
>  
>
Derrick
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