XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks Online
Country Restriction: Australia only
Risk Type: Tax Risk
Business Function: Contacts
Overview
The "Donation against non-DGR entity" XBert checks payments you have recorded as donations. In Australia, only gifts to organisations the Australian Taxation Office (ATO) has endorsed as Deductible Gift Recipients (DGRs) can be claimed as a tax deduction. If you record a donation to an organisation that is not a DGR, you could claim a deduction you are not entitled to. This XBert catches that before it becomes a problem.
What it does
It reviews supplier bills from the last 12 months that were coded to a donation account. For each supplier, it takes the ABN on the supplier's contact record and checks it against the ATO's official register of Deductible Gift Recipients. If the ABN is not on that register, the donation may not be tax-deductible, and the XBert raises an alert.
How it works
The XBert raises an alert when all of the following are true:
A supplier bill in the last 12 months is coded to an active donation account (an account with "donation" in its name).
The bill total is more than zero, and the bill is not deleted, voided or in draft.
The supplier's contact record has an ABN.
That ABN is not on the ATO's register of Deductible Gift Recipients.
To avoid false alarms, the XBert stays quiet in a few cases. It ignores donation accounts that have been archived or made inactive, and accounts set up for bank or merchant fees. It also stays quiet when the supplier has no ABN, because it cannot confirm DGR status without one. Finally, if the supplier's name clearly matches a well-known DGR-endorsed charity (for example when the contact was linked to the wrong ABN), the XBert recognises the genuine charity and does not raise an alert.
Example/Use Case
Ruby's bookkeeper records an $85 payment to the local football club and codes it to the "Donations" account, expecting it to be a tax deduction. The club has an ABN, but it is not endorsed as a Deductible Gift Recipient, so this XBert flags the payment. The donation cannot be claimed as a deduction, so the bookkeeper recodes it as a general expense.
By contrast, Gary donates $85 to the Australian Sports Foundation, which is DGR-endorsed. Because that ABN is on the ATO's register, the donation is genuinely deductible and no alert is raised.
Accounting software
Xero, MYOB, QuickBooks Online.
Which countries it supports
Australia only.
Processes
This XBert is part of the Contacts business area (Cleanup). To check and correct a flagged donation:
Confirm the recipient's ABN and DGR status using the ABN Lookup website.
If the supplier's ABN is wrong or missing, update it on the contact record so the correct organisation is checked.
If the organisation is genuinely not DGR-endorsed, recode the payment from the donation account to a more suitable account (for example a general or non-deductible expense) so it is not claimed as a tax deduction.
Only treat donations to verified DGR-endorsed organisations as tax-deductible.
Once the record is corrected, mark the XBert as resolved.
Keeping donation records accurate helps you claim the right deductions and avoid penalties from incorrect tax claims.