Set up unrealized VAT for cash-based accounting

If you're using cash-based accounting methods, you can set up Business Central to handle unrealized GST/HST.

To use general ledger accounts for unrealized GST/HST

You can choose to have GST/HST amounts calculated and posted to a temporary general ledger account when an invoice is posted, and then posted to the correct general ledger account and included in GST/HST statements when the actual payment of the invoice is posted. Before you can do this, you must complete the GST/HST posting setup.

To use accounts for unrealized GST/HST, follow these steps:

  1. Choose the Lightbulb that opens the Tell Me feature. icon, and enter General Ledger Setup.
  2. On the General Ledger Setup page, select the Unrealized GST/HST check box.
  3. Choose the Search for Page or Report icon Lightbulb that opens the Tell Me feature., and enter GST/HST Posting Setup.
  4. On the GST/HST Posting Setup page, choose the GST/HST posting group, and then choose the Edit action.
  5. In the Unrealized GST/HST Type field, choose an option to specify how to allocate payments to the invoice amount (excluding GST/HST) and the GST/HST amount itself, and how to transfer GST/HST amounts from the unrealized GST/HST account to the realized account. The following table describes the options.
Option Description
Blank Choose this option if you don't want to use the unrealized GST/HST feature.
Percentage Payments cover both GST/HST and the invoice amount in proportion to the payment's percentage of the remaining invoice amount. The paid GST/HST amount is transferred from the unrealized GST/HST account to the realized GST/HST account.
First Payments cover GST/HST first and then invoice amounts. In this case, the amount transferred from the unrealized GST/HST account to the GST/HST account will equal the amount of the payment until the total GST/HST has been paid.
Last Payments cover the invoice amount first and then GST/HST. In this case, no amount will be transferred from the unrealized GST/HST account to the GST/HST account until the total amount of the invoice, excluding GST/HST, has been paid.
First (Fully Paid) Payments will cover GST/HST first (like the First option), but no amount will be transferred to the GST/HST account until the full amount of GST/HST has been paid.
Last (Fully Paid) Payments will cover invoice amount first (like the Last option), but no amount will be transferred to the GST/HST account until the full amount of GST/HST has been paid.

  1. In the Sales GST/HST Unreal. Account field, choose the account for unrealized sales GST/HST.

    Note

    The GST/HST amount will be posted to this account, and stay there until the customer payment is posted. The amount is then transferred to the account for sales GST/HST.

  2. In the Purch. GST/HST Unreal. Account field, enter the general ledger account for unrealized purchase GST/HST.

Note

The GST/HST amount will be posted to this account, and stay there until the customer payment is posted. The amount is then transferred to the account for purchase GST/HST.

Set Up Calculations and Posting Methods for GST/HST

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