- Failing to use a “z” in the HST box when remitting your payment.
- Posting a G/L adjustment entry involving HST and failing to place a checkmark in the “Show on Journal Entry on HST Journal” box.
- Using a receipt entry to record a HST refund. Instead, use a cheque and enter a negative amount.
Sunday, March 13, 2011
Goods and Services Tax (HST) Report
The Goods and Services Tax Report, now HST, is a seemingly fairly straight forward. The bottom of the report provides you with all the information you need to complete your HST return. In my bookkeeping practice I have found that this report is often misunderstood, and frequently results in posting errors.
Firstly, the method of producing the report is commonly misunderstood. The report should be run by only changing only the end date, to capture all of the data. Running from January 1st to December 31st, will not capture any write-downs or other year-end adjustments made in the previous years.
Secondly, when viewing the report, the General Reconciliation Balance, Period Totals, and Running Balance should all be the same amount. If these three amounts are not the same, your HST report is out of balance, and a posting error has been made.
The three most common posting errors are:
If you find that your HST report is out of balance, carefully review past entries and make adjustments accordingly. The importance of maintaining accurate HST records can best be emphasized by the penalties and interest levied when Revenue Canada gets involved, or the loss of input tax credits which directly results in a loss of income.
In addition to helping my regular clients, I am happy to assist anyone on a consultancy basis, if they need help correcting errors in their HST report, or anything else.
As always, I invite your comments and suggestions for future post topics. Next week – Do your PCLaw cheques, invoices, and reports still show GST? I will tell you how to change this to HST.