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Tracking Canadian GST

Applies to:

[x] C&P Classic
[x] C&P Pro
[x] Job Tracker
[x] Enterprise
[x] My C&P!

SUMMARY: How to track GST collected and GST tax inputs using Clients & Profits.

Recording the GST tax that you collect from your clients and the GST tax that you pay to your vendors is a simple process using your Clients & Profits program. At any point in time you can easily determine your GST liability for all posted transactions.

Once you have set up your Clients & Profits database to properly record GST into your general ledger, you will have to input the GST amount on each Accounts Payable and Accounts Receivable transaction.

  • Create a general ledger account for the GST in your Chart of Accounts.

You only need one account set up as a liability. Generally, you will collect more GST from your client billings than you will have paid to your vendors and you will have a credit balance for this liability account. This credit balance is the amount you owe for GST. However, if the GST tax inputs are greater than the GST collected for some period, you will have a debit balance for this liability account and may be due a tax refund or credit.

  • Create a task for GST.

This task may have any code, but GST is a simple one to use. Whatever description you input for the task name will appear on client invoices.

The cGL and dGL will both be the chart of accounts number for GST that you set up in your general ledger. All other task information may be left blank; or, if you use the group and sort features, designate the GST task with an appropriate group and sort so that it will appear as you want it to on your Accounts Receivable invoices.

Job Tickets

  • Always enter GST as one of the tasks for the job so that GST may be charged on the job.

You may input the GST task at any time. If you DO NOT want it to appear on an estimate, enter the GST task after the final estimate has been printed for the client.

Accounts Payable

When you enter invoices from your vendors, the amount of GST is input as a separate line item. Just copy the amount directly from the vendor bill. Every invoice for a job cost that includes a GST amount (international invoices may not require it) will be distributed over at least two tasks--the job cost task and the GST task.

  • Choose Add New Invoice in Accounts Payable.

Enter a payable per the directions in the manual. However, always click on the option Distribute to many jobs, tasks so that you can enter the appropriate job cost task(s) as well as the GST task and amount(s).

  • Proof and post as directed in the manual.

The GST paid will show up on the jobs and in the general ledger once the invoice is posted.

Accounts Receivable

When you enter invoices for your clients, the amount of GST is simply input as a separate line item. You will have to calculate the amount of GST manually and then input the total for the task on the invoice.

  • Choose Add New Invoice in Accounts Receivable.

Enter client invoices per the directions in the manual. However, make sure to always bill the GST task.

  • Proof and post as directed in the manual.

The GST collected will show up on the jobs as billed and in the general ledger once the client invoice is posted.

General Ledger

As soon as an accounts payable or accounts receivable transaction with a GST amount is posted, the general ledger total for the GST account will be updated automatically.

Use the financial reports under Snapshots or the audit trail in the General Ledger section to see totals and details about your GST liability at any time.

Media Accruals

If you are a C&P Pro or Enterprise user and are using the automatic media accruals feature, make sure you pay special attention to how you handle your GST. If you do not add your GST to your order, make sure when you add GST to your media accrual A/P invoice that you do not reference the same order line number twice. Otherwise, you will reverse the accrual twice for this line number, causing your media accrual job cost and liability account balances to be incorrect. In this case, add two A/P invoices, the first as a media accrual A/P invoice for your buys, and the second as a job cost invoice for the GST. Pay both of these invoices when paying your vendor. You can add a "-1" or the like to the invoice number of the second invoice so you know these two invoices go together. To read more about the automatic media accrual feature, refer to the Media Accrual FAQ.

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