XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks
Country Restriction: CA only
Risk Type: Tax Risk
Business Function: Purchases
Overview
The “Payment to a Cancelled Supplier” XBert detects authorised payments and bank transactions made to suppliers whose Business Number has been deregistered or marked as inactive in Canada's Business Registries. This alert helps you verify that you are not making payments to unregistered entities, which can affect your GST claims and tax compliance.
What it does
XBert checks whether payments or authorised bank transactions were made to suppliers with deregistered Business Numbers. If these transactions occurred after the supplier was marked inactive in Canada's Business Registries, XBert flags them to ensure you can review and take appropriate action.
How it works
XBert reviews:
Authorised bill payments and authorised spend bank transactions
Transactions that occurred after the supplier’s deregistration date and after the business joined XBert
Suppliers whose Business Number matches a record in Canada’s Business Registries and has a status of deregistered or inactive
If one or more transactions meet this criteria, XBert generates an alert with the total dollar value of affected payments.
Example / Use Case
Bill owns a pizza shop and purchases a new oven for $6,000 from a supplier. He later discovers that the supplier’s Business Number had been deregistered at the time of payment. When Canada’s Revenue Agency reviews his GST Return, they deny his input tax credit, and Bill must pay $2,820 in withholding tax. If Bill had verified the supplier’s registration status beforehand, he could have avoided this unexpected cost.
Accounting software
Xero, MYOB, QuickBooks
Which countries it supports
Canada only
Processes
This alert is part of the Purchases & Payables (AP) process and supports compliance by verifying that payments are made only to properly registered businesses.
To resolve this issue:
Verify the supplier’s Business Number using the Canada Business Registries website.
Contact the supplier if there are any doubts, and request updated registration details.
Update the Business Number in your accounting software once confirmed.
Review and adjust any associated bills or bank transactions, especially if GST was incorrectly applied.
Avoid future payments to deregistered businesses unless you have a valid reason and understand the potential tax implications.
By addressing these inconsistencies early, you can protect your business from unnecessary tax liabilities and maintain a clean, compliant accounting ledger.