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
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.