Business must get house in order

SMALL to medium size business should rein in debtors and get their cash management houses in order to help prepare for the GST, the Aust-ralian Society of CPAs has warned.

Australia’s largest accounting body warned that businesses currently experiencing trading terms difficulties risked serious cash flow problems when GST collections and payments were added to their cash management workload.

Those who had cash management under control and who planned purchases could benefit from the quarterly remittance and claim structure.

The CPAs’ WA spokesman on GST issues, Mr Tony Ince, said the GST would mean many businesses with accrual (invoice) based accounting systems would have to bring debt collection to well below sixty days.

“With the advent of the GST, businesses will need to rein in their debtors or risk having to pay GST on money they haven’t yet received,” said Mr Ince.

Mr Ince said business could also benefit from the GST, depending on timing of supply or purchase.

Under the new system, business with annual turnover of more than $50,000 would be reimbursed for GST input tax credits on legitimate business purchases every quarter.

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