On July 1st
the announced GST 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 six 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 June and then set the rate to six percent before invoicing for July.
Companies that overlap invoicing based on submission of time cards and such may
have to juggle invoicing in 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
July, so there may be a mild slump in sales in June rebounding in July for
those companies affected.
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 July
at some time.
A brief list of
programs that require GST changes:
Order Entry
Go into Order
Entry to the <F3> Setup Menu.
Select 61. Table
& List Maintenance.
Select Tax Rates
Table Maintenance.
Press <F8>
to call up next tax record.
For each GST item
at 7% set to 6% and press <F10>
Press <F8>
again to scan for additional GST rates
Some clients deal
with multiple provinces, so several rates may need to be adjusted. I assume HST
rates will also drop to 14% although this needs to be confirmed.
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 the end of July Reports. Keep in mind that you may need to reset rates
to 7% if you run reports for time periods prior to July 1st at some
future time.
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 tax rates that
you can change. If you are sure that your program uses GST calculations but
cannot locate a place to change rates call us in advance of the end of June to
make sure that you will be compliant on July 1st.
A short list of
common modules using GST rates:
-
Order Entry
-
Purchasing
-
Time Accounting
-
Personnel Invoicing
-
Property Management
-
Marina Management System
-
Marina Work Order Processing
Should the
current government remain in power a future reduction in GST to five percent is
promised sometime in the next five years.
Property Management
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 July or create Event Records dated July 1st
to accommodate the change. The method you use will be dictated by the way that
your taxes are currently set up in the module.
If this task is
too time consuming we can create programs to update Property Management Records
via some form of Mass Update. A minor expense that can save a good deal of
work.
Custom Report Writer Reports
Some clients have
created custom reports using Libra’s Report Writers that incorporate formulas
to calculate GST. 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 7% and another at 6%. Most
reports can be altered later on in July for this purpose.