When you enter an EXPENSE that includes a GST component, if your Fund is registered for GST, you will need to make a separate Journal Entry to account for the GST. Automated entry of the GST component of expenses is being incorporated in a Mclowd software upgrade to be available soon.
Mclowd displays a list of previous journal entries (if any).
Click ADD NEW JOURNAL ENTRY.
Mclowd displays the Journal Entry screen:
You will need to reduce the debit in the expense account to which you allocated the expense entered above by the amount of GST charged, and credit the GST to the GST Paid account.
Begin by entering the Date the expense was paid and assigning a Name to this transaction. (e.g. GST on Hills Management Invoice for May)
On the first line, in column 1, select the same Member Account/Fund as you selected when entering the expense. (It is important that the GST component be credited to the same account as it was debited to.)
In Column 2, select the expense Account to which you debited the expense.
Enter a Description, noting that this is GST and describing the expense as you did when entering it.
In the CREDIT column, enter the amount of GST paid. (Usually the total invoice amount divided by 11.) This reduces the total in the expense account by the amount of GST included in the expense.
On the second line, in column 1, select Fund.
If this expense was allocated to a member, the GST credit must also be allocated to the Member in order to ensure the debit to the Member account is the NET cost, but the GST should always be debited to the Fund, as the Fund will claim the GST credit at the end of the period.
Click the ADD JOURNAL ENTRY button at bottom left of the screen to save the transaction.
This reduces the balance in the Expense account by the GST amount and transfers the GST to the GST Paid account. At the end of the quarter, you can view the GST Paid account to determine the credit you should claim from the ATO.
For instructions on processing the end of period BAS return, go to ACCOUNT MAINTENANCE: JOURNALS – BAS RETURNS.
If you enter multiple expenses at the same time, you may wish to combine the GST journals for several invoices. To do this, use the same process as above, but enter the GST credit for each individual expense, ensuring that you assign each to the correct Member/Fund and Expense Account. Then enter a single debit for the total GST charged across all the listed invoices.