Alterations to GST rate 'no sweat' for Accredo customers
The widely anticipated rise in Goods and Services Tax (GST) expected to occur later this year shouldnt be a cause for concern for users of the Accredo system, says Accredo General Manager, Tish Brindle.
She says she expects the Government to make an announcement in the May Budget confirming the details and timing of the GST rate rise, widely tipped to be as early as October this year.
"Rather than waiting until it is announced, we are letting users know well in advance that the system, as it stands currently, will be able to accommodate any rise in GST," says Brindle.
Looking ahead, she says the company is already implementing changes to the next release of the software which will make it as simple as possible to accommodate GST rate changes.
"Once the change is announced, we will distribute a paper that documents how we recommend the change of GST rate should be handled in the current release (3.0) of the software," says Brindle. "Accredo is an open period system and when the new rate comes in there will be a time during which customers will need to handle GST at the old rate, at the same time as they handle the new rate. Careful cutover processing is required since there is not a time dimension to the GST rates in Accredo currently."
Brindle says the next software release, available to all users who are on a current update subscription, will automatically manage GST rate changes, minimising any problems during the changeover period.
"In the next release, which will be out prior to any change in GST, GST rates have an effective date and a single GST code may have more than one rate. Accredo will automatically use the correct GST rate based on the transaction or document date."
Brindle says as a result of a rise in GST, businesses will have to carefully handle a number of issues, such as raising credits after the rate change for goods supplied at the old GST rate and managing GST inclusive price lists.
"For GST inclusive pricelists, companies will need to decide whether they are going to increase the prices and announce that to customers, or effectively take a price cut and keep the inclusive price the same under the new rate."
Suggested handling for credits and price list updates will be covered in the GST paper.
Says Brindle: "The key action around GST changes it to communicate any changes impacting your customers. Think carefully about the effect across your business and communicate what you plan to do well in advance, so your customers have time to adjust."« Back to articles