What I asked at the GST Expo & Conference 2014
The GST Expo kicked off today 1st October 2014 and it was rather crowded considering it being a working day. My interest was centered on finding good GST compliant accounting software but only managed to ask 3 vendors: SQL, QnE & Wavelet due to my time rush.
Hopefully, this feedback could prove useful to you all. Please do leave a comment if you have anything to add on…
I don’t claim to be an expert in GST or Tax and only took about a day to pick up some pointers here and there from Google and my student, Helen Phang to help clarify some technical terms. So, do help to correct me for any unintended mistakes and inaccuracy if any.
I got requests from some students regarding which accounting software is good and GST compliant. Thus, I have listed some questions which you may be asking when shopping for GST compliant accounting software (You need some basic knowledge of GST to understand the software system requirements):
1. Auto calculate GST for Sales amount and/or auto include GST within the Sales figure function
Most software will auto calculate the 6% GST based on the sales amount but some software may be less flexible when you want to absorb the GST for your customer. For example, Selling price is $100 and GST should be $6 (6% X $100) but if you absorb the GST then the customer only pays you $100 but you still need to allocate for 6% of GST. Thus, the system should be able to auto INCLUDE GST (Sales $94.34 and 6% GST $5.66). SQL and MYOB have such feature. Also check other software as I didn’t managed to ask them.
2. Most GST compliant software can autofill all your data for the GST 3 Form to be submitted to Customs every quarterly?
Companies are required to submit quarterly GST 3 Summary Report to Customs and each GST transaction needs to be grouped into specific categories in accordance with their standardized form. If the software doesn’t have this feature then the poor Accounts Assistant has to manually categorize and fill in the forms every 3 months, a very daunting task indeed. SQL, MYOB and Tally.ERP9 have such features and perhaps some others also have.
3. GST kept for at least 7 years?
GST records should be kept for a minimum of 7 years and Customs may request you to provide a detailed listing of all this transactions. Check that your remote server or cloud computing allows your records to be stored for such long period, taking into consideration the volume of your transactions, storage space, storage costs, etc.
4. GST Audit File (GAF) format for tax audit by Customs
Customs may request you to provide a detailed listing of all transactions via a fixed formatted text file GST Audit File (GAF) that can be submitted online via customs GST portal to assist their audit. This file is automatically generated.
5. Which server; either Microsoft SQL or Firefox or ‘whatever’?
Your data would be stored in their servers and they could be running on Microsoft SQL or Firefox or something. Check how much do the vendors charge annually for data storage. You should also check the processing capacity of the servers and I heard that Microsoft SQL handles large data well. Not too sure about others. Not much of an IT geek, can someone please comment further, thanks.
6. Keeping track of the 21 Days rule
Tax Invoice must be issued within 21 days after the D.O. or services performed. Most system can’t keep track of the 21 days and send a reminder for you to track and prevent any late issue of invoice. QnE can track the 21 days. Others probably can too.
7. Bad Debt relief adjustment
You have included GST for Tax Invoice but that customer failed to pay you and became a bad debt but you have already paid the GST portion on his behalf. The software should allow you to list out such GST amount for you to get a refund.
If later on after 180 days, the same customer pays you back the amount, then, you need to be able to track back the bad debts and pay back again that portion of GST to Customs.
8. Generate Notification letter for Bad debts relief
When you claim back the GST for Bad debts, the system should be able to generate out a Notification letter for Bad debts relief to be sent to your customer. QnE can print out such Letter. I am not sure but I think others may not.
9. The system should already have all the 23 Tax Codes and most have more (up to 30 Tax Codes) to allow for different circumstances e.g. purchase for own use
There is a total of 23 Tax Codes eg. Purchases exempted from GST, Purchases (GST not claimable), Sales (GST not claimable), etc. and you should be able to set for each customer regarding their GST status, the same applies to suppliers as some input tax may not be claimable while others are claimable. The big problem with this is that the same supplier may sell you goods which are GST claimable and also other goods which are not GST claimable. Your system should be able to handle the different combination well for different customers, suppliers and also GST claimable and not claimable goods. If you are selling to a Labuan customer, then, you can’t charge the customer GST at all.
10. The system should automatically enter the double entry for Input tax, Output tax, Payable tax, etc.
Another issue is that sometimes goods are purchased for own use, then, you can’t claim the GST but have to charge it as part of your expenses or capitalized within asset purchased. The system should be able to handle the journal entries. Claimable GST (Input tax) should be capitalized as an asset while Payable GST (Output tax) is recognised as liability (not tax expense). However, GST paid to supplier that is not claimable is recognised as expense. I know this gets very confusing so get some help if you don’t get this…
11. Convert from DO to invoice or POS to invoice? Which is better?
12. E-voucher claim
13. iPad, Android access
Most systems runs on multiple devices such as iPad or iPhone, Android devices as well as Window based computers. Better check with the vendors and test where possible. One freelancer I met that day told me his client complained about the font size of the reports which is too small for his eyes and that is why he used QnE as there is a magnifying function. However, the client still complained about it every now and then. Using other touch screen devices may help to magnify the figures in the reports.
14. Free training 6 months to one year
Also check out the free training offered by vendors; which ranges from 6 months to one year. Mostly they limit to one or two staff and will charge for any additional staff. This has always been a problem because staff turnover is very high for companies. I know that UBS becomes popular as the training is widely available in Malaysia. Better to go for one where training is solid and well supported. But I was surprised that UBS and Sage were not represented in the Expo.
Hope the above information helps. Happy software hunting!