When it comes to GST reporting, if your systems and procedures are in place and managed effectively, it’s a relatively smooth procedure. This is where Tradie Bookkeeping Specialists come into their own. If you own or operate a Trade Business, we are the industry specialists and we are here to help you.
With GST reporting there are options on how you can report: with cash and accrual methods; with cash accounting and cash GST reporting or with accrual accounting and accrual GST reporting.
The key difference between cash and accrual GST reporting methods is really determined by when your liabilities are recorded and when you report the tax collected and the tax charged. Cash accounting and cash GST reporting are not the same thing.
Cash accounting records expenses when you physically pay the supplier and income when you actually receive payment. This means that from a GST perspective if you receive an order of timber and have 60 days to pay it, cash accounting will record the liability in 60 days when you pay for it. If you bill a customer, you are not liable to pay the GST component until the customer pays you.
Accrual accounting, on the other hand, records expenses generally when you receive an invoice or the stock and records income on the day, rather than when it is actually paid to you.
If you are a small business entity with an aggregated turnover of less than two million dollars, if you account for income tax on a cash basis or you are not a business but your enterprise GST turnover is two million or less, then you are eligible for cash accounting.
It is advisable to seek advice from a professional before deciding which form of GST reporting best suits your unique profile. Ask Tradie Bookkeeping Specialists to confer with you to achieve the best outcome for your specific trade business.
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