GST and using or receiving digital currency

Posted on 13 December 2023 | by Allan Hall

What to do when you receive and use digital currency as payment for goods and services

Digital currency as payment for goods and services

Receiving or using digital currency to pay for goods and services in your GST-registered enterprise is the same as using money, but it is different to trading digital currency.

Receiving digital currency

If you make a taxable supply and you receive digital currency as payment, the GST amount for that payment included in your business activity statement must be in Australian dollars.

Your tax invoice must meet the normal tax invoice requirements and include either:

the GST payable in Australian dollars
sufficient information to work out the GST payable in Australian dollars.

Examples of sufficient information includes the:

price expressed in Australian dollars
value expressed in Australian dollars, or
conversion rate used by the supplier, or a statement, to work out the GST payable if it is not in Australian dollars.

Using digital currency

If you use digital currency to make a purchase for your GST-registered enterprise and claim a GST credit, the GST amount of the credit in your business activity statement must be in Australian dollars.

To work out your GST credits, your tax invoice will include either:

the GST amount in Australian dollars
sufficient information to determine the GST amount in Australian dollars.

How to convert digital currency

To work out the value of your digital currency for your business activity statement, you must use the exchange rate on the conversion day that applies to you.

Exchange rate

If the exchange rate is in Australian dollars, you may choose to use the exchange rate:

from a digital currency exchange or website, or
agreed on between the supplier and the recipient.

If the exchange rate is in a foreign currency, you must convert the amount expressed in foreign currency to Australian dollars.

Conversion day

The conversion day is the date you use to convert your digital currency into Australian dollars.

If you account for GST on a non-cash basis, your conversion day is determined by whichever happens first of either the:

day you receive any of the payment
transaction date or invoice date.

If you account for GST on a cash basis, your conversion day can be the transaction date, invoice date or the day you receive any of the payment.

CONTACT ALLAN HALL BUSINESS ADVISORS

5 tips for Xero users

Posted on 19 December 2022 | by Allan Hall

Five tips from this year’s Xero quarterly product updates

Did you know that Xero has an inbuilt calculator? Are you across Xero’s inbuilt timesaver features? Across useful ways to use contact groups?

1. Save time with the inbuilt calculator

Did you know that Xero has an inbuilt calculator? It allows you to calculate amounts as you create transactions. When you are in a numeric field in Xero, you can enter a calculation and then press Enter or Tab, and Xero will calculate the result. For example, entering 7+2 and then Enter will display as the number 9 in the field.

The calculator is available in the Quantity, Unit Price and Disc % fields in transactions, and the Debit and Credit fields in manual journals.

In new invoicing, discount percentages are calculated automatically, so the calculator isn’t needed.

2. Add planned payment dates from the Awaiting Payment tab in bills

This tip helps you manage cash flow and plan when to pay bills. You can add a planned date to a purchase invoice in the Awaiting Payment tab to create a planned payment schedule.

This is great for businesses with a daily payment limit on their bank accounts, because Xero totals the bills as you select them — so you can see if the total exceeds your daily limit. If you’re using short-term cash flow in Xero Analytics, this also makes it easy to keep your planned payment dates up to date, so your cash flow forecast is more accurate.

3. Use keyboard shortcuts to navigate around Xero

Here’s a great timesaver which you can use from most screens in Xero. If you enter the forward slash (/), you’ll open the global search. You can then type a letter to navigate straight to a page.

For example, entering ‘/b’ will take you to bills, ‘/c’ will take you straight to contacts and ‘/d’ will take you to the dashboard.

Read more about shortcuts in Xero »

4. Use repeating invoices for customers who pay a monthly fee

For businesses with regular sales to particular customers, repeating invoices can be a big timesaver. Let’s say one of your customers pays you a monthly fee. You can set up a repeating invoice template so Xero automatically creates a new invoice each month.

Set how often you want Xero to create the invoice, choose the date of the first invoice and then select when the invoice is due. If it’s the same amount each month, click ‘Approve for Sending’. Then each month, Xero will create the invoice, approve it, and email it to your customer.

5. Add suppliers to contact groups for the method of payment

This is a useful way to use contact groups. If you pay some suppliers by bank transfer and others by direct debit, add them to contact groups for the method of payment.

This lets you search the bills ‘Awaiting Payment’ page by payment type and you can sort, group, or filter the Payable Bills reports to make managing your bills payable and generating bank transfer payments easier.

Got a question about making the most of accounting or bookkeeping in your business? Get in touch with our Xero specialists who will be able to assist you with all your cloud accounting queries.

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Getting help during coronavirus (COVID-19)

Posted on 8 August 2022 | by Allan Hall

If you need a payment during coronavirus (COVID-19)

There’s support available if you or your family were affected by coronavirus (COVID-19).

Pandemic Leave Disaster Payment is support if you can’t earn an income because you or someone you’re caring for has to self-isolate or quarantine due to COVID-19.

Crisis Payment for National Health Emergency (COVID-19) is a one-off payment. It’s for people who get an income support payment and are in severe financial hardship due to COVID-19.

If you need ongoing financial support

If you need another payment or service, read more about getting a Centrelink payment.

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