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Switching from Accrual Basis GST to Cash Basis GST reporting

This page is for MYOB Advanced consultants

Check all changes in a test environment before taking them live. Make sure all related features still work as expected and that your data is unaffected.

MYOB Advanced provides users the ability to report GST on an Accrual Basis or a Cash Basis. It is crucial that implementation consultants should define and clarify the GST reporting requirements with their customers prior to implementing the system, and it is highly recommended that once a GST reporting method is decided, it should be final. However, under some circumstances, the reporting requirement needs to be changed. This knowledge base article describes how to switch from Accrual Bases GST reporting to Cash Basis (Payment Basis) GST reporting.

These instructions are for MYOB Advanced builds 2021.117.400.6951 [21.117.0037] onward.

Scenario

  • Customer has gone live with Accrual Basis GST in tax period 01-2022 (01/07/2021 to 30/09/2021)

  • Customer would like to switch to Cash Basis GST in tax period 02-2022 (01/10/2021 to 31/12/2021)

  • Example BAS reporting period used in this knowledge base article is Quarterly.

  • There have been transactions posted in both AP and AR subledgers. But in particular, there are:

    • AR Invoice 000001 – released and paid in Tax Period 01-2022

    • AR Invoice 000002 – released but not paid. The payment of this AR Invoice comes in Tax Period 02-2022 (after the user has switched from Accrual Basis to Cash Basis).

    • The tax report detail of period 01-2022 (Accrual Basis) shows as following – as you can see, because period 01-2022 is Accrual Basis, the tax report includes both invoices, regardless of whether they have been paid or not.

To switch from Accrual Bases GST reporting to Cash Basis (Payment Basis) GST reporting

  1. Create a test tenant from the live tenant.

  2. Log a ticket with Support team at https://partnerportal.myobadvanced.com/ to request the Payment Basis GST feature to be turned on.

  3. Choose a cut-off date which is equivalent for a quarter period, it means you can either go live by Oct 1 or Jan 1 or April 1 for Australia company and using July to June financial year. In the example of this scenario, the cut-off date is 01/10/2021, which corresponds to tax period 02-2022

  4. Make sure the system does not have any ATO supplier invoices coming from BAS process.

  5. Go to the Enable/Disable Features screen (CS100000), turn on the Payment Basis GST feature (if this is not yet turned on)

  6. Go to the ATO supplier Tax agency tab and set the GST recognition method as On payments

    1. Set the input and output tax entry reference as Payment Reference Number

    2. Leave the default reporting period as it is

    3. Save the ATO supplier

  7. Setup all the taxes to support cash-based GST by ticking the pending GST option in the Tax area (Please refer to the cash base GST configuration guide for this – in this example, only G1SALES GST is updated, but you will have to do this for all the taxes are will be reported in the Cash Basis).

  8. Go to Tax Periods screen, check and verify that the Tax Period set up here is correct (e.g., the start date, end date of your tax periods are correct)


    Note: If you go to the prepare tax report area and you are getting some values here from previous months which was based on accrual basis, we first have to clear those. And in order to do this, go to the configuration >> reporting settings area and make sure the net tax button is unmarked for line 33 (This is to ensure that when processing BAS that belongs to a previous period that get reported in the current period, the system doesn’t post any resulting ATO AP document, in order for us to have a clean start).

    Once you have set up the above then go to the prepare tax report area and process all the period up until the latest period for testing (this is already done above, see the last screenshot of the “SCENARIO” section).Once you reach the cut off period then process some AP, AR invoices and check if it is only recognized after the payment has been applied by using the recognize AP and AR GST feature.

  9. Once you reach the cut off period then process some AP, AR invoices and check if it is only recognized after the payment has been applied by using the recognize AP and AR GST feature.

    1. For this scenario, we’ll create a payment to pay off AR Invoice 000002 on 01/10/2021, which corresponds to Tax Period 02-2022, running on Cash Based GST.

    2. Also, we’ll create a new invoice for this new period as well: Invoice 000003. But we will not pay this invoice yet (to test if an invoice is unpaid, whether it’ll be reported in the BAS or not):

    3. Go to the Recognize Output GST screen, set Tax Agency = ATO, review the documents in the list, notice that nothing is in here, this is because.

      1. Even though Payment 000002 is created this period and applied on invoice 000002, the tax amount of invoice 000002 has been already reported in the previous period using the Accrual Basis:

      2. Invoice 000003 is created in this period, but it has no payment, therefore nothing is recognized.

    4. Now create a payment to pay off invoice 000003:

    5. Go back to the Recognize Output GST screen, this time you see invoice 000003 here. Click “Process All” on the menu to process pending GST for this invoice.

  10. Once everything comes properly then also test by using BAS feature to make sure right amount is incorporated in the BAS area:

    1. Go to the Prepare Tax Report and prepare the tax report for period 01-2022. Review the tax amount and the documents that are reported in this period: as you can see, only invoice 000003 is reported in this period, which is correct.


      NOTE: If in the previous steps, you have unticked the Net Tax box in the reporting line 33 in the Reporting Settings screen, then you need to tick it again before you process BAS, so that ATO documents can be created after the tax report is released.


      Please note, this above example discussed only the AR side. You need to test for the AP side and Recognize Input GST as well. The testing procedure is similar.

Once you have satisfied with the above testing and process then ONLY apply it in live environment and make sure it has appropriate start date otherwise report period will be incorrect.

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