For Canadian businesses, managing Goods and Services Tax (GST) refunds efficiently makes things easier for maintaining accurate financial records and ensuring compliance with GST remittances. QuickBooks Desktop Canada offers powerful tools to streamline this process, making it easier for businesses to record and track GST refunds.
In this guide, we'll walk you through the steps to accurately record your GST refund in QuickBooks Desktop Canada.
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Here's how to do it.
Step 1: Access the Banking Module
To begin recording your GST refund, open QuickBooks Desktop Canada and find the deposit for the GST refund. If it has not yet been recorded, you can Make a Journal Entry or enter the refund through the menu selection Customers -> Receive Payments.
Of course, this assumes the GST was filed through the Sales Tax -> Tax Agency Report process.
You can check the accounts receivable to make sure the amount for the GST is in there. If not, try this process:
1. On the top Menu click Sales Tax -> Tax Agency Report
2. Select “Receiver General” for Tax Agency
3. Select “Last Sales Tax Quarter”, “Last Sales Tax Year”, or “Last Sales Tax Month” depending on how often you pay sales tax. If the sales tax period is from a previous quarter, month, or year, manually select that period.
4. Check that the Line 113C Balance is the same number as your GST refund.
5. Click File Tax Return on the upper right corner
6. You can file GST on the CRA website and click Receive Later
7. Your GST Refund will show up in the accounts receivable and the tax agency report for that period should now show ZEROs other than Line 101 Sales and Other Revenue.
Step 2: Choose Bank Account
Select the bank account into which the GST refund was deposited. This will typically be your business checking or savings account.
Step 3: Record the Deposit
Next, locate the GST refund deposit transaction in your bank account register. This transaction should reflect the amount of the refund received from the Canada Revenue Agency (CRA). Click on the deposit transaction to open it.
If the deposit has not yet been recorded move on to the next step.
Step 4: Categorize the Deposit
Assign the appropriate account category to the deposit transaction. In QuickBooks Desktop Canada, if you have not recorded the deposit yet, you can receive the payment by:
1. Click Customers -> Receive Payments
2. Select “Receiver General” in the Received From box
3. Enter the payment amount
4. Deposit to the bank account
If the deposit is already in the QuickBooks bank account, categorize the transaction as Accounts Receivable and the customer is probably going to be Receiver General – receivable.
Step 8: Verify the Transaction
To ensure that the GST refund has been recorded accurately, review your bank account register and the corresponding GST payable account in your Chart of Accounts. The refund amount should be reflected in both places.
Step 9: Reconcile Your Accounts
Finally, reconcile your bank account to ensure that your records match your bank statements accurately. This step is essential for maintaining the integrity of your financial records and detecting any discrepancies.
Conclusion:
Recording GST refunds in QuickBooks Desktop Canada is a straightforward process that involves categorizing the deposit, allocating the refund amount to a GST payable account, and reconciling your accounts to ensure accuracy. By following these steps, you can streamline your tax accounting processes and maintain compliance with Canadian tax regulations.
If you encounter any difficulties or have specific questions about recording GST refunds in QuickBooks Desktop Canada, don't hesitate to consult us for assistance.
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