Free Accounting Software + Tax Returns, BAS, Bookkeeping and Payroll from Free Accounting Pty Ltd

Free Accounting Software Forum - Purchase Orders

Back to all forums
29/01/2012
PDF Template for Credit Purchases and Cash Payments

Hi Glen

I would like to use this software to email a purchase order (to consolidate everything in order to not double handle)

My original thoughts were to create a "Credit purchase" then when the goods arrive I can make a "Cash Payment"

How ever I am not GST registered (so my tax description is No GST Applicable) yet the companies I purchase my goods from are GST registered so the purchase order needs to show the GST component.

Any ideas how I can show the GST on the "Credit Purchase" in order to email it as a purchase order but have no GST applicable when it comes to making the cash payment?

Cheers for your help
Stacey
01/02/2012
Whilst the Credit Purchase can be conveniently used as a purchase order there are a couple of traps that you need to be mindful of.

For businesses that are not registered for GST, you could make the Credit Purchase function as a purchase order by uploading a custom Credit Purchase PDF template with:
1. all the GST fields deleted.
2. A statement that the prices are inclusive of any GST.

The second point is just to make it clear so that the seller does not then add GST in addition to the quoted price.

I'll email you the PDF template so that you can edit it.

I'll just cover some other issues for businesses that are registered for GST:

Businesses that are registered for GST it's more complicated. The BAS can be done by the Cash accounting method or accruals accounting method.

If you are using the accruals accounting method you can only claim GST when you have a valid Tax Invoice and it goes by invoice date. So if you entered a Credit Purchase on 31 March and you don't receive the invoice till 1 April you BAS will be incorrect and you need to change the date of the Credit Purchase to fix it.

If you are using the Cash accounting method it should work because the system will only claim GST when you pay for it. So in this case if the Credit Purchase is dated 31 March and the invoice comes in 1 April and you only pay for things after getting a valid Tax Invoice it will be fine. The software will make an adjustment on your BAS so that GST is not claimed until the purchase is paid for.
 

Post a New Message

You must be logged in to post a message.