System implications of GST increase

 

The upcoming increase in GST rate means some action for most businesses on the software front.  Typically if you’re using the latest version of your software, any upgrade to manage the change in GST will be reasonably painless.  But where you’re using an older version, you may find yourself needing to upgrade to the latest version before any patches or updates for the GST changes will work.

Here is a summary of what will be required for users of the more common software packages used by owner-managed Kiwi businesses.

 

MYOB

If you’re not using the most recent version of MYOB, you’ll need to upgrade.  Dig out your software serial number and key it into the box on the MYOB website >>> to check whether you need to upgrade.  MYOB will soon release a patch to registered users of the latest version which will create a new GST rate code and update debtors, creditors and recurring transactions.  It will also generate a transitional GST return and a new 101 GST return report.

 

Xero

As Xero is delivered as a service on a subscription basis and accessed online, there are no upgrades required at your end.  You have already paid for any upgrades at the Xero end as part of your monthly subscription.  Look out for the usual notification box when you log in explaining any changes Xero may make to the interface in response to the GST changes.

 

MoneyWorks

MoneyWorks already has a facility allowing a change in the GST rate from a particular date, so no upgrade is necessary – even if you are using a very old version of the software.  Users will need to change the GST rate in the MoneyWorks Tax Table in their software – and to set the appropriate date of 1 October and the software will automatically take effect on the date.  Step by step instructions are available on the Cognito Software website here >>>.

 

BankLink

BankLink also already allows for a change in the GST rate in “Other Functions”, “GST Setup”.  You can enter the new GST rate now along with the date (1 October) for the new rate to take effect.  Also expect a free patch to amend the 101 GST return report.  BankLink are running free 30 minute webinars to help users through this if they are having difficulties.  Upcoming webinar times are on their website here >>>.

 

QuickBooks

If you haven’t already done so, you’ll need to upgrade to the latest version (2010/11) or QuickBooks Online.  The distributors, Quicken, will release a patch on 24 September for these two versions only.  The patch will automatically change the “S” tax item to 15%.  You will be able to select the appropriate GST code after 1 October, while historical data will remain unchanged.  Instructions will be posted on the Quickbooks website here >>>  on 24 September – and they will detail the checks and action you will need to take.  Disks will also be made available on 1 October. 

If you’re running the 2008 / 09 version, it appears possible to bypass the 2010/11 upgrade and the upcoming patch by manually changing the GST rate – although we don’t recommend it.  If you want to go down that path, please do not manually change the S rate from 12.5% to 15%.  Rather create a new tax code and tax item for GST for the 15% rate which will report through to the Tax reports and the GST 101 report.

 

CashManager

Users will need to upgrade to CashManager 2010 if you haven’t already done so.  This latest version will allow the new GST rate to be entered and utilised throughout the package.  Instructions on how to change the GST rate in CashManager 2010 are on the Accomplish website here >>>.

 

Although some earlier versions of these packages allow you to manually change the GST rate in the setup menus – and it may seem tempting to stick with your existing version of the software if it is only couple of years old, we don’t recommend this.  The time, energy and cost of unravelling errors later will likely far exceed the cost of upgrading now to stay with the latest fully supported version of your software.

If you have any concerns or problems, just call us.