The idea of setting up a new business is a job that takes a lot of effort. While working on setting up a new business, there is a lot of things that the users would have to give their attention t, and this is in no way an easy task. A major part of starting a new business is the accounting perspective. Xero can efficiently aid a user who is willing to start a new business, as this software provides the users with all the necessary features needed by the users. The users can get a clear understanding of this by doing a complete run through this blog. The users would also have an alternate option of connecting with Xero customer care number, where the users would get all the assistance that is required.
Understanding the use of Xero in a new business
If the user is buying or selling good and service, then it is necessary that the business is registered for the Goods and Services Tax (GST).
GST is mandatory for the following reasons:
- If your business has a GST turnover of $75,000 or more.
- If your non-profile organization has a turnover of $150,000 per year or more.
- If you are an overseas business importing services, digital products, or goods worth less than $1000 and make over $75,000.
With the help of Xero, you would simply require to set up the software accurately, and you would need to know whether you are on a cash basis or accruals basis.
The process of computing GST on ‘Cash Basis’ using Xero
Xero’s cash basis GST return is when the user pays money for something in return for a product. The transactions that you would have to provide in your Xero data file are as given below:
- Invoice payments received
- Bills Paid
- Expense claims paid
- Manual journals on the journal date where the checkbox shows journal on cash basis reports are selected.
- Spend money transactions.
- Receive money transactions
The process of computing GST on ‘Accrual Basis’ using Xero
Xero’s accruals basis GST return is when you receive any payment for a sale, or when you receive the invoice from your supplier or if you make a payment for something that you have purchased. The transactions that you would have to provide in your Xero data file are as given below:
- Invoices on the invoice date
- Bills on the bill date
- Expense claims on the reporting date
- Manual journals on the journal date
- Spend money transactions
- Receive money transaction
These are basics that you would need to understand while using the Xero software for a newly started business. If you fail to understand any given information, you can easily connect with Xero customer support number, where the professionals would give you detailed information about the features and functions.