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  1. Post
    brand wrote:
    It is legal but not good practice. Technically you need an invoice if you want to claim GST.

    An invoice is basically a formal demand for payment.

    Why would your supplier not give you an invoice? And why are you so eager to pay without having received an invoice?
    Thanks for your reply.
    I'm making a software as a service to connect buyers and suppliers, where payments will be going through this middleman website. Want to automate who whole purchase process including payouts to suppliers to make it easier and less time consuming for them.
    If i add GST to statement of sales that i send to suppliers can this be considered as a formal reason for payment and can i claim GST based on this?
    Cheers

  2. Post
    markagev wrote:
    Thanks for your reply.
    I'm making a software as a service to connect buyers and suppliers, where payments will be going through this middleman website. Want to automate who whole purchase process including payouts to suppliers to make it easier and less time consuming for them.
    If i add GST to statement of sales that i send to suppliers can this be considered as a formal reason for payment and can i claim GST based on this?
    Cheers
    The invoice also needs to have the suppliers GST number and there is always the possibility that some suppliers are not GST registered or the customer is overseas so it can't be one size fits all.

    If you are just the middleman then the actual claiming and paying GST still lies with the customer and supplier respectively unless you have an agency relationship with both of them and intend to take care of GST on their behalf in which case I admire your ambition but yikes!

  3. Post
    brand wrote:
    The invoice also needs to have the suppliers GST number and there is always the possibility that some suppliers are not GST registered or the customer is overseas so it can't be one size fits all.

    If you are just the middleman then the actual claiming and paying GST still lies with the customer and supplier respectively unless you have an agency relationship with both of them and intend to take care of GST on their behalf in which case I admire your ambition but yikes!
    Awesome, thanks brand!
    Right, im just a middleman. This means that I can simply pay to a supplier based on account statement where i will include all their sales and include this statement as attachment to a bill in Xero as a proof/reason of payments, is it right?

  4. Post
    markagev wrote:
    Awesome, thanks brand!
    Right, im just a middleman. This means that I can simply pay to a supplier based on account statement where i will include all their sales and include this statement as attachment to a bill in Xero as a proof/reason of payments, is it right?
    Yes you are just Paypal etc. It would be on the Supplier to send an invoice to the Customer if one was requested. You could build in that invoice functionality and offer it as a service to the Supplier but it should be their responsibility to make sure the details were correct.

  5. Post
    Thanks brand! Sorry for asking ambiguous questions.

    Right im sort of paypal.. Here how my business model looks like:

    1. Supplier creates products on my site (e.g. product price $220 incl GST)
    2. Buyer buys this product
    3. Me as a middleman issue my invoice to the Buyer (total invoice amount $220)
    4. Buyer pays me on my bank account
    5. I issue an invoice for my commission to the supplier and pay the full amount less commission (+GST on commission) to the Supplier ($220(total price)-$44(commission)=$176). This transaction is supported with that account statement with details of supplier sales.

    I want to avoid buyers asking suppliers to provide invoices, etc. and keep it simple for both Buyer and Supplier, so they don't spend any extra time for admin, communication and so on.

    Can i still avoid being responsible for Buyer and Supplier's GST in this setup? Can I just be accountable for GST on my commission?

    Thanks a lot!

  6. Post
    markagev wrote:
    Thanks brand! Sorry for asking ambiguous questions.

    Right im sort of paypal.. Here how my business model looks like:

    1. Supplier creates products on my site (e.g. product price $220 incl GST)
    2. Buyer buys this product
    3. Me as a middleman issue my invoice to the Buyer (total invoice amount $220)
    4. Buyer pays me on my bank account
    5. I issue an invoice for my commission to the supplier and pay the full amount less commission (+GST on commission) to the Supplier ($220(total price)-$44(commission)=$176). This transaction is supported with that account statement with details of supplier sales.

    I want to avoid buyers asking suppliers to provide invoices, etc. and keep it simple for both Buyer and Supplier, so they don't spend any extra time for admin, communication and so on.

    Can i still avoid being responsible for Buyer and Supplier's GST in this setup? Can I just be accountable for GST on my commission?

    Thanks a lot!
    You aren't responsible for the GST but if you are sending out invoices on the Supplier's behalf you really need them to give you the correct details to put on the invoice and make sure GST has been treated correctly.

    Also sales to overseas customers won't have GST so there so needs to be a mechanism to adjust that.

    I can see what you want to do but the invoicing aspect brings a lot of complication. Say something goes wrong with the product or the Customer wants to return or exchange it -what happens?

    If the Customer provides the invoice for a warranty claim that invoice number won't be in the Supplier's system etc.