XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks Online
Country Restriction: Australia and New Zealand
Risk Type: Tax Risk
Business Function: Purchases
Overview
The "Non-GST account has GST against it" XBert flags accounts that are set up as non-GST — such as GST Free, GST Exempt, BAS Excluded, No GST or Tax Excluded — that have GST recorded against them anyway. A mismatch like this can lead to incorrect GST on your activity statement and unwanted attention from the tax office.
What it does
XBert reviews the bills and invoices posted in roughly the last three months. For each account that is treated as non-GST, it adds up the GST recorded against that account, month by month, and compares the result against a small threshold. It then highlights the accounts and months where GST has been recorded when it should not have been.
How it works
This XBert raises an alert when all of the following are true:
An account is treated as non-GST (for example GST Free, GST Exempt, BAS Excluded, No GST or Tax Excluded), and
Bills or invoices posted to that account in the last three months have GST recorded against them, and
The net GST for that account in that month is more than $5, whether positive or negative.
To keep the alerts meaningful, this XBert deliberately ignores some things:
It looks only at the net GST for the month. If a GST entry was later fully reversed so the account nets back to around zero, no alert is raised — there is nothing left to fix.
It ignores bank accounts, accounts payable, accounts receivable and system accounts.
It only counts live bills and invoices (authorised, paid or submitted). Voided, deleted and cancelled documents are excluded.
The figure shown is the true net GST for the account that month, so you can see exactly how much is at stake.
Example/Use Case
Priya sets up a new revenue account called "Consulting Revenue – Exempt" and marks it as GST Free, because she believes the work is GST exempt. Over the next month, $1,650 of consulting invoices are coded to that account — and GST of $150 is recorded against them anyway. Because the account is meant to be GST free, that $150 should not be there. XBert flags the account and the month, showing the $150 net GST. Priya checks the tax treatment, corrects the GST on the invoices (or fixes the account's tax setting), and her next activity statement is reported correctly.
Accounting software
Xero, MYOB and QuickBooks Online.
Which countries it supports
Australia and New Zealand.
Processes
This XBert is part of the Cleanup business area. Keeping GST off your non-GST accounts keeps your activity statement accurate and reduces the risk of tax-office adjustments or penalties. To resolve it:
Open the flagged account and review the bills or invoices that recorded GST in the affected month.
Decide whether the GST is the mistake, or whether the account's tax setting is wrong.
If the transactions are genuinely GST free, correct the tax code on those bills or invoices so no GST is recorded.
If the account should actually attract GST, update the account's tax setting and re-check the affected transactions.
If your activity statement for that period has already been lodged, check whether an adjustment is needed.
Once the account is correct, mark the XBert as resolved.