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4 simple (but expensive) bookkeeping errors XBert will help you eliminate.

by Kue Hall ~ 3 min read

XBert's audit risk alerts for GST, ABN and incorrect tax status will help bookkeepers save time and have confidence the books are accurate and up-to-date

The economic landscape for business is changing so rapidly, that what you knew 6 months ago about suppliers or customers for a business, may no longer be accurate. Incorrect tax information, GST/VAT status or ABNs may seem like the simplest of bookkeeping errors, but they can wreak havoc for businesses and their bookkeepers.

GST and ABN changes for a supplier or customer of a business can easily slip under the radar, take hours to find manually (if at all) and can cause considerable upset for a business and their bookkeeper – both on the time spent rectifying the issue, and for cashflow.

XBert’s audit risk alerts have been designed to help you be alerted whenever something is amiss, while knowing the information you’re working with is accurate. So, it made sense for us to automate and remove the margin for human error on some of the most basic (but incredibly important) checks across GST, tax information and Australian Business Numbers.

1. Incorrect GST status for a business

It can be a simple administrative or bookkeeping error: for example, the contact defaulting to GST on Expenses in your accounting software. Or, a business you have been dealing with for years could be having a tough time over the past 12 months and as such, is no longer required to be registered for GST. If this problem has been going on for a long time, and a business has been claiming GST credits from the ATO in error – they may now have to repay the ATO the amount claimed.

Similarly, a business may spend money, expecting to claim back GST paid to a supplier. This creates stress when they do not get the money back from the ATO. In all of these instances, not only is the businesses cashflow significantly affected, it wastes hours of time on rework and rectifying the issue. XBert will flag when a business has an ABN that is not currently registered for GST, has been set to GST on Expenses. With direct links to the ABR, you can immediately confirm the supplier's contact records, check their GST status and the head to your accounting software to review invoices and bills accordingly.

2. Incorrect ABN for a business

Whether a business or supplier has not provided you with an ABN, or you’ve incidentally entered the incorrect number, this alert will save your bacon (and hours of rework).

Without an active or correct ABN, it’s hard to discern whether you’re trading with a business that is who they say they are. If a supplier does not provide its ABN, you could run into trouble with the ATO. You may need to withhold an amount from the payment for that supply. Without an ABN, you cannot check if a company is registered for GST and could end up paying GST that you can't claim back on your BAS - or you may pay no GST and be liable for that amount.

XBert will flag if a supplier or contact has no ABN – or an ABN that does not match up with the Australian Business Register, so you can proactively check and correct any issues before it’s gone to that stage.

3. Large GST activity for a contact without ABN

Not having an ABN for a contact in your accounting software can be a simple oversight but similarly, can cause major issues in regards to checking GST status and tax payments.

XBert will flag when you have GST activity on a contact that does not have an ABN – not only saving you time finding the issue but with quick-links to double-check to ensure you’re dealing with a registered business, that they are registered for GST and everything is in line with the way it should be.

4. Donation Against Non DGR Entity

For a donation or gift to be tax deductible, it must go to an organisation or fund that has Deductible Gift Recipient (DGR) status. Incorrectly claiming a tax deduction lowers your income and the tax payable and once discovered, you may need to pay more tax based on your revised income.

It takes time and effort to resolve and revise tax submissions. This alert will allow you to quickly be aware if a claimed donation is legitimate or not – saving hours of rework and avoiding any cashflow implications.


XBerts

It’s never been more important to know the books are up-to-date and accurate. The implications of dealing with an unregistered business are too high. Changes in GST status can be painful and time consuming to resolve once detected.

Whether it’s an incorrect ABN or a flag on the GST status – these checks are designed to help both businesses and bookkeepers save time, safeguard the books and be alerted to issues, errors and inconsistencies as they arise.

If you’d like to sleep better at night knowing the books are accurate and you haven’t missed a thing: start a free trial with XBert below and load one of your Xero, MYOB or QuickBooks files. XBert will automatically get to work analysing your files and our awesome customer success team can walk you through how XBert works for you, in your practice.