Reconciling the Remittance Accounts

As with any account on the balance sheet, you always need to be able to make sense of the numbers. For example, if your payroll tax liability account says that you owe $12,410, but you know that you are not behind in your remittances and the remittance for the last month is $1,747, you should be able to tell at a glance that something is wrong. Here are some troubleshooting tips for finding problems with the remittance accounts:

• Print out a detailed listing of the transactions in the remittance accounts. If you are on a manual system, scan the general journal in the appropriate remittance column. Make sure that you can find a remittance entry for each period you actually made a payment. For payroll liabilities, it's likely to be monthly (so there should be 12 entries for the year). In Canada, for GST, it's likely to be quarterly (so there should be four entries for the entire year). If there are fewer remittance entries than expected, it's possible that you have put the remittance entry in the wrong account. Retrace your entries.

• If there are the right number of entries but there's still a balance left over, group the transactions by remittance period. For example, you would look at each GST period for which you made a remittance. Does the difference between the GST collected for the period and the GST paid for the period equal the amount that you remitted? If not, you may have made a mathematical error in calculating your remittance, in which case, you will need to correct the remittance. Another possibility is that after you remitted for that period, you posted an entry into that period. To avoid this situation, ensure that your bookkeeping for that period has been completed and the bank account reconciled before you calculate the remittance.

• Check the balance owing on your books against the statements you receive from the government. Do they match? If not, the government may have posted one or more of your payments incorrectly. Or you may have forgotten to actually send in the remittance. Look into the accounting detail and track down the source of the problem