XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks Online
Country Restriction: Australia only
Risk Type: Tax Risk
Business Function: Purchases
Overview
This XBert finds payments your business made to a supplier after that supplier's Australian Business Number (ABN) was cancelled on the Australian Business Register (ABR). Paying a supplier with a cancelled ABN can create GST and withholding problems with the ATO, so it is worth reviewing each one.
What it does
XBert checks the ABN on each of your suppliers against the Australian Business Register. When a supplier's ABN shows as cancelled, XBert looks at what you paid that supplier and flags the money paid on or after the cancellation took effect. It adds up the total paid to that supplier in this state so you can see the size of the exposure at a glance.
How it works
XBert reviews two kinds of spending: authorised supplier payments recorded against a bill, and authorised spend money transactions in the bank. For each one, it checks whether the supplier's ABN is recorded as cancelled on the ABR. The ABN is taken either from the supplier's contact record or, where the contact has no ABN, from the most recent confirmed ABN XBert holds for that supplier.
The XBert only fires when both of the following are true:
The payment is dated on or after the date the supplier's ABN was cancelled. Money paid while the ABN was still active is ignored.
The payment is dated after your organisation was first connected to XBert, so historical transactions from before you joined are not raised.
XBert deliberately leaves out voided and deleted transactions, and only counts authorised supplier payments and spend money entries. Each flagged payment is matched to the correct supplier, so spending with one supplier is never mistakenly attributed to another.
Example/Use Case
Bill runs a pizza shop and buys a commercial oven for $6,000 from a supplier. Unaware that the supplier's ABN had been cancelled the month before, Bill authorises the payment. Later, the ATO questions his return. Because the supplier was no longer registered, Bill should have withheld 47% of the payment, and the GST he claimed on the purchase is now in doubt. Had he checked the ABN status first, he could have asked the supplier for a valid ABN or chosen another supplier. This XBert surfaces that $6,000 payment so Bill can review it and put it right before it becomes a bigger problem.
Accounting software
This XBert runs on Australian organisations connected through Xero, MYOB and QuickBooks Online.
Which countries it supports
Australia only.
Processes
This XBert falls under the Purchases (AP) business area and helps you manage the tax risk of paying suppliers whose ABN has been cancelled. To resolve it:
Look up the supplier's ABN on the ABN Lookup service to confirm whether it is active or cancelled.
If the ABN is cancelled or incorrect, contact the supplier and ask for their current, valid ABN.
Update the ABN on the supplier's contact record in your accounting software.
Review the affected bills, payments and bank transactions, and check whether any GST claimed or withholding obligation needs to be amended.
Hold off on further payments to a cancelled or unregistered supplier until you have confirmed their registration and assessed any tax obligations.
Once the supplier details are corrected and any tax impact has been dealt with, mark the XBert as resolved.