Reporting GST to ATO can be done by using following two methods.
- Accruals (Non Cash) Accounting
- Cash Accounting
Different entities use different methods of accounting. Accounting method selection is based on the revenue and the nature of business. If, company’s annual turnover is less then $2 millions, or if they are a Charitable Institution, or a trustee of a charitable fund or a gift deductible entity. Then they can use Cash Accounting Method.
In some cases, organisations can request authorisation from ATO to use Cash Accounting even if their annual turnover is more than $2 million.
Selection of accounting method describes how you are going to record income and expenses for GST purposes.
The method of recording and or acquiring the GST portion may be done by:
- As per sighted on the receipts or invoices
- Or via the simplified accounting method
Cash Accounting
In the even of cash accounting transactions can be recorded in following manners.
- When a cash or credit purchase has been paid.
- When a cash or credit sale has been receipted.
It is very easy to record transactions through cash accounting as recording is based on the flow of money.
Non-Cash Accounting
In this method, businesses must record GST at the time of the following events:
- When a purchase is made for either cash or credit whether paid or not.
- When a sale is made for either cash or credit whether the amount owing is received or not.
As a registered Tax Agent, we are assisting people to maximise their tax refunds and explains, which option is best suits them.
For further assistance, please contact Taxplanners on 1300 000 TAX (1300 000 829), 03 9600 0143 (10 Lines).
You can also visit our office for assistance –
Melbourne CBD – Suite 411-413, Level 4, 343 Little Collins Street, Melbourne
Werribee Office – 88 Watton Street, Werribee, Contact – 03 901 MY TAX (03 9016 9829)