Alternate Australian GST setup

The following GST scheme is used by MYOB BussinessBasics.

Since GST is money you owe the government (or visa versa) you create an account called:

• Liabilities:GST

Then, to make your balance sheet more informative, you create two sub accounts:

• Liabilities:GST:Collected
• Liabilities:GST:Paid

Whenever you receive income you record the GST component in Liabilities:GST:Collected and whenever you make a purchase you record the GST component in Liabilities:GST:Paid.

At the end of each accounting period if you owe the government money then you record the amount you paid it in Liabilities:GST:Paid. Or if the government owes you money then the amount you receive should be recorded in Liabilities:GST:Collected.

This simple scheme can easily be modified to be the same as the 3-account system. in this scheme Liabilities:GST:Paid is exactly the same as in the 3-account system, but Liabilities:GST:Collected is given the rather confusing name of Liabilities:GST:Payable. To move to the 3-account system all you need to do is create a new account called:

• Liabilities:GST:BAS

This is where all of the GST money you pay the government is recorded. In the 3-account system this account is called Liabilities:GST:Payments.