XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks
Country Restriction: Australia only
Risk Type: Tax Risk
Business Function: Purchases
Overview
The "Expenses with a Cancelled Business" XBert flags when you have a bill still owing to a supplier whose ABN has been cancelled on the Australian Business Register (ABR). Paying or claiming expenses against a cancelled business can create GST and tax problems, so it pays to check before you settle the bill.
What it does
XBert looks at your supplier bills and checks each supplier's ABN against the latest information on the Australian Business Register. It focuses on bills that still have an amount owing, and matches the supplier to a business whose ABN is recorded as cancelled.
It identifies the supplier in two ways:
The ABN saved on the supplier's contact matches a cancelled ABN on the ABR; or
The supplier has no ABN saved, but the most recent ABN we have on record for that supplier matches a cancelled ABN on the ABR.
How it works
This XBert raises an alert when a supplier bill meets all of the following:
The bill still has an amount owing (it is unpaid or only partly paid).
The supplier's ABN is recorded as cancelled on the ABR.
The bill date is on or after the date the supplier's ABN was cancelled.
The bill is in a normal working state (draft, submitted, approved or paid). Voided and deleted bills are ignored.
Draft bills are included on purpose, so you get the warning before you commit to paying a supplier whose ABN has been cancelled.
To avoid false alarms, XBert ignores any supplier whose ABN has since been reactivated (changed back to active on or after the cancellation date). It only checks Australian accounting files.
This XBert covers expenses you owe to suppliers only. Income owed to you by a cancelled business is handled by a separate XBert. Where one supplier has several qualifying bills, XBert combines them into a single alert and totals the outstanding amount.
Example/Use Case
Bill, who owns a pizza shop, has an approved bill of $6,000 still owing for a commercial oven supplied by "Hot Stuff Ovens". XBert checks the supplier's ABN and finds it was cancelled on the ABR two months before the bill date. Before paying, Bill contacts the supplier and learns the business was wound up and re-registered under a new entity. Because he caught it early, Bill updates the contact with the correct, active ABN and avoids having to withhold tax at the top rate and a possible problem with his next BAS.
Accounting software
All major Australian-compatible accounting software (for example Xero, MYOB and QuickBooks Online).
Which countries it supports
Australia only.
Processes
This alert falls under the 'Bookkeeping - Purchases (AP)' area and helps reduce tax and audit risk. To resolve it:
Check the supplier's ABN on the ABN Lookup website.
If the ABN is cancelled or incorrect, contact the supplier and ask for a valid, current ABN.
Update the supplier's contact record in your accounting software with the correct ABN.
If no valid ABN can be supplied, be cautious about paying the bill. You may be required to withhold tax at the top rate (currently 47%) on payments to a supplier with no valid ABN.
Review any GST claimed on the bill to make sure it is still correct.
Once the supplier details are corrected or the bill is dealt with, mark the XBert as resolved.
Acting on this alert protects your business from ATO penalties and helps ensure you only trade with compliant suppliers.