Could a massive tax bill be just around your corner because you incorrectly claimed back GST? Would your business, or your client's business, survive if the ATO came knocking and you had to pay back thousands?
XBert is the simple way to keep GST fraud risk at bay and gives you peace of mind knowing that your claims are correct.
Imagine you've been working with the same supplier for the past five years. You have a strong relationship, and they've always provided goods on time. But behind-the-scenes your supplier's in trouble. Their revenue has dropped to below the GST threshold. Now they've deregistered for GST without you knowing.
The supplier's latest invoice to you is for $50,000 + GST. If you pay, then claim the $5,000 GST on your BAS, the tax office will make you pay it back. Oh crap!
This could be devastating for your business and cash flow, especially if this happens over several transactions since the supplier deregistered.
You have no idea that things have changed. The invoices keep coming inclusive of GST, and you keep paying.
Tens of thousands of dollars of incorrectly claimed GST piles up. Then, the ATO demands you pay back two years' worth of GST credits you should never have claimed.
You get a sick feeling in the pit of your stomach. The ATO doesn't care that it was your supplier's fault.
They want the money from you.
You clear the ATO debt and now have to recover the overpayments from the supplier. You have no idea how long that will take, and you're left out of pocket in the meantime.
If you've been dealing with the same supplier for years, it's unlikely that you or your bookkeeper would regularly check their GST status once set up in your accounting records. Generally, records are only updated when your supplier tells you something has changed.
If you're a bookkeeper, you have many entries to reconcile EVERY. SINGLE. DAY, and hundreds of suppliers to deal with. There aren't enough hours in the day to check every individual supplier each time an invoice or bill is received.
Most assume that if the invoice includes GST, then the company is registered to charge it.
However, that's not always the case. It may be an innocent oversight by the supplier, or worse, a potential case of GST fraud. The business owner may be at fault, or completely oblivious. Perhaps they instructed their finance person to stop charging GST, but that person is doing a little "creative" accounting; sending invoices with GST and pocketing the extra.
Businesses can register and deregister for GST at any time. How are you supposed to keep track?
Luckily XBert provides a simple way to make sure you never claim GST from a non-registered business again.
As a small business owner or bookkeeper, your time is precious. You can't analyse every single accounting entry in detail when there are a hundred other things to complete today.
After dealing with the same supplier for five years, it's easy to get complacent. We like to think we can trust everyone we trade with, and don't question whether they're still registered for GST.
Your supplier's circumstances may have changed. Maybe business has slowed, and their income has dropped below the $75,000 GST threshold. They've cancelled their GST registration but continue to charge GST on their invoices, which you pay expecting no problems when you claim it on your BAS.
Instead, you get a nasty shock when the ATO demands you pay back any GST you claimed.
Now you have to chase the supplier to refund the overpayments. Or, even worse, the supplier has disappeared, and you've lost all that money for good.
XBert regularly connects with the Australian Business Register. When their records update, so does XBert. You'll receive an XBert risk alert if there are any discrepancies with a supplier's GST status and your records.
The XBert you receive advises you that the payment you've made to your supplier for $50,000 + GST may be incorrect. The supplier does not appear to be registered for GST, and you will not be able to claim that $5,000 on your BAS.
XBert advises you confirm the supplier's GST details, request a revised invoice or bill, and that any GST amount paid gets refunded or credited to your account.
Once you've received a new invoice or bill, enter it into your cloud-based accounting system linked to XBert. You can also update the supplier's details and tax rate, so their GST status is correct.
You'll need to make sure you haven't already claimed the GST amount on your BAS.
XBert warned you of a potential risk before you knew the risk existed. You checked your supplier's GST status on the Australian Business Register, and that caught the problem early.
You request an adjusted invoice and fix their details in your accounting system - before it costs you money, or tax debt, and causes a massive headache.
GST errors and potential fraud are just some of the many risks XBert will find reviewing your accounting data on an hourly basis. Using sophisticated algorithms, predictive analytics, and machine learning, XBert is there to detect business risks, saving you time and money.