On January 1st the GST tax reduction comes into effect. This means that all billing and reporting modules that currently employ GST calculations will need to be adjusted to set the rate to five percent at that time. For companies that have a fairly clean month-end this should not be a problem. You can complete all invoicing for December and then set the rate to five percent before invoicing January. Companies that overlap invoicing based on the submission of time sheets and such documents may have to juggle their invoicing in separate batches at the two rates.
For most companies, the change in GST rates is not significant since the rates they charge and pay are going down at the same time. Companies only remit the difference between GST collected and paid so it has little effect on purchasing decisions. End users on the other hand will pay one percent less for goods in January, so there may be a mild slump in sales in December, hopefully rebounding in January 2008.
For the most part, billing modules permit the change of tax rates fairly easily. The occasional report or calculation may be hard coded at a fixed rate and these programs will need to be changed in January 2008.
A short list of common modules using GST rates:
- Order Entry
- Time Accounting
- Personnel Invoicing
- Property Management
- Marina Work Order Processing
Go into Order Entry to the <F3> Setup Menu.
Select: 61. Table & List Maintenance.
Select: Tax Rates Table Maintenance.
Press <F8> to call up the next tax record.
For each GST item at 6%, set to 5% and press <F10>
Press <F8> again to scan for additional GST rates.
clients deal with multiple provinces, so several rates may need to be adjusted.
HST rates will also drop to 13% for most of the
GST Rates can take the form of tax rates in the Tenant File or Event Records in the Event File. In either case mass changes are required to update these tax rates. You can change Tenant Rates prior to assessing January or create Event Records dated January 1st to accommodate the change. The method you use will be dictated by the way that your taxes are currently set up.
If this task is too time consuming we can create programs to update Property Management Records via some form of Mass Update. This will likely be a minor expense, but one that can save a good deal of work.
Visual Accounting Features
Anyone that uses the Visual Accounting Features module to run Tax Reconciliation Reports will need to adjust tax rates in 91. Edit Company Constants as well, before running January Reports. Keep in mind that you may need to reset rates to 6% if you run reports for time periods prior to January 1st at some future time.
Report Writer Reports
Some clients have created custom reports, using Libra’s Report Writers, that incorporate mathematical formulas to calculate GST amounts. These formulas will need to be edited to conform to the new rates. In many cases you can copy the report to a new report format and change the rate there, which provides for one report at 6% and another at 5%. Most reports can be altered later on in January for this purpose.
Custom Written Programs
Most custom billing modules will have tax rates built into the Company Constants. This is most often located in either <F3> Setup or <F8> Utilities menus. Look for a program that is called either Company File Maintenance or Edit Company Constants and check for the existence of any visible tax rates that you can easily change.
If you are sure that your program uses GST calculations but cannot locate a place to change the rates call us in advance of the end of December to make sure that you will be ok when the rates come into affect January 1st.