Changing GST rate in Quickbook
Recently GST rate has once again been decreased from 6% to 5%, which is a good news for consumers. However technically it can be a daunting tasks. The changes in 2006 from 7% to 6% had generated a lot of problems with large companies and some small businesses. Luckily most Quickbook users are running small to medium business, even if you are running a corporate scale business, changing tax rate is a bliss. Quickbook is intelligent enough to allow you to change the tax rate without affecting your old transactions with the old tax rate. It is also flexible enough to record your tax amount without the constraint of the tax rate set up in the system.
First, let me refresh how to change tax rate.
- Go to List menu, click Tax Code List
- Double click on GST and change tax rate from 6 to 5
- Do the same with Standard
Scenario 1: You haven’t finished enter all your data from 2007
Continue to complete enter all your transaction from 2007. After that change the GST tax rate. Now you can start entering your 2008 data. Notices that your GST rate for the new data entered after you change the tax code is automatically calculated with the new tax rate.
Scenario 2: You have finished enter all your data in 2007, and moving on the 2008
You can go ahead and change your tax code before you enter your 2008 data. The new entry will use the new tax rate to calculate your GST.
Scenario 3: You already have entered data for 2008, but it is still using the old tax rate, the numbers are all wrong.
First, change your tax rate now. This will ensure all your new transaction entries have the correct tax rate. To fix the data that has incorrect tax rate, you need to go back to all your 2008 transactions you have already entered, and change the amount in the GST field to the correct amount manually, and change the total to the correct amount, press save to save the transaction.
I hope you don’t have a lot of data to fix! If you do, I would still recommend you to go back to all your transactions and change them manually. This will ensure accuracy of your data. If you really do not have the time to fix your data, you will need to do a general journal entry. General entry for this required bookkeeping knowledge and also Quickbook knowledge, I would strongly recommend you to find a Quickbook specialist in this case if you don’t know what you are doing.
