GST PST Tax Behaviour in Management System

Updated September 25, 2026 12:25

Overview

The management system calculates GST and PST in specific ways depending on whether the job is supply only or supply and install. This paper will explain how the system handles GST and PST. Please consult your accountant with this information to gain advice on how to remit the taxes. We are educating you on how the system handles the taxes; it is your responsibility to use this information to accurately remit your taxes.

Setup Process

You must have proper tax ledger accounts setup in order for the system to post taxes properly. Typically, for each type of tax there are 2 accounts; GST collected, GST prepaid, and PST collected, PST prepaid. The tax ledger accounts are setup to perform the following functions:

GST Collected: This is the GST calculated at the job on the sell price of material and labour on both supply only and supply and install jobs.

GST Prepaid: This is the GST charged to you by the vendor.

PST Collected: This is the PST calculated at the job on the sell price of materials on supply only jobs.

Supply and install jobs will calculate PST on the cost of materials freight based on system settings and report to the sales taxes report but will NOT post to any financial ledger in the system.

PST Prepaid: This is the PST charged to you by the vendor.

These four (4) ledger accounts are mapped in the Store Information area of your system’s Admin>Defaults screen. These are the defaults for the liability side of GST and PST postings.

GL Tax Account Primary (Collected) = GST Collected GL (Tax at AR Invoice)

GL Tax Account Primary (Pre-Paid) = GST Prepaid GL (Tax at AP Bill)

GL Tax Account Secondary (Collected) = PST Collected GL Supply Only Jobs (Tax at AR Invoice)

GL Tax Account Secondary (Pre-Paid) = PST Prepaid GL (Tax at AP Bill)

Supply and install jobs will calculate PST on the cost of materials freight based on system settings and report to the sales taxes report but will NOT post to any financial ledger in the system.

Lastly, check the displayed tax types, and PST cost basis setting to make sure the calculations are correct. In the Admin>Defaults>Accounting Defaults area, select which tax types should be displayed as options at the job level in the “Select Tax Types To Display” box.

Choose the correct PST Basis and PST Cost Factor in the area for each of these. Located below the tax types to display.

System Postings

The financial ledger is affected in the following manner:

GST Collected GL is posted by invoicing the job to accounts receivable. When the job is transferred to an invoice, the system will post the GST calculated on the job to the GST Collected ledger account.

GST Prepaid GL is posted by accepting the vendor bill in accounts payable. When a bill is entered and the Prepaid Tax 1 (GST tax) field is populated with the GST, the system posts that paid GST to the GST Prepaid ledger account.

PST Collected GL is posted by invoicing the job to accounts receivable ONLY on supply only jobs.

PST Prepaid GL is posted by accepting the vendor bill in accounts payable. When a bill is entered and the Prepaid Tax 2 (PST tax) field is populated with the PST, the system posts that paid PST to the PST Prepaid ledger account.

Supply and install jobs will calculate PST on the cost of materials freight based on system settings and report to the sales taxes report but will NOT post to any financial ledger in the system.

Reports

Sales Taxes Reports

The Accounting reports lists two (3) sales taxes reports: Sales Taxes by Job Closing Date, Sales Taxes and Sales Taxes (Paid Invoices). Both reports are populated by the AR invoice created for the job.

The Sales Taxes reports AR invoices in the time period regardless of paid status or closing date.

The Sales Taxes (Paid Invoices) reports AR invoices in the time period that have been fully paid in that time period regardless of closing date.

Choose the report appropriate for the way your accountant advises you to remit taxes. Only the Sales Taxes report aligns with the system ledger. The other 2 reports are reports that are conditioning chosen by the user to remit taxes and will not align with the financial ledger postings.

The Sales Taxes reports displays the GST Collected for all types of jobs (both supply and install and supply only) and the PST Collected for all types of jobs (both supply and install and supply only).

When the report is first generated, the system displays a summary of total taxes for each tax authority (GST and PST).

Use the magnifying glass to see AR invoice detail and job type indicators inside each tax authority.

The Basis column shows if the job is Supply Only (SO) or Supply and Install (SI). Each AR invoice is listed. This report displays only the AR component of taxes. The sales tax report does not display any payments made to the tax vendors nor does it display the AP component of taxes.

Account Inquiry Reports

The account inquiry reports are reports on the financial ledger activity. These are the reports that are needed to query the AP (accounts payable) side of GST and PST. The sales taxes reports do not display the prepaid taxes entered in AP. Only the Account Inquiry can show these postings.

Account inquiry report for Prepaid (AP) Taxes is generated on two ledger accounts: GST Prepaid and PST prepaid. These are the accounts that AP posts to when processing vendor bills. This is the tax already paid through AP bills.

Generate account inquiry reports from the Accounting reports section on both Prepaid ledger accounts.

PST calculated on cost of goods is displayed on the sales taxes report but does not post to the ledger. You will need to make appropriate journal entries to post this PST to a ledger account. Typically the posting is to a PST expense account and AP. Please consult your accountant regarding this process.

Financial Implications

You will need both the Sales Taxes report and the Financial Account Inquiry reports to figure your tax remittance.

To find what is calculated as “owed” to the government, run the sales tax report.

To find what is calculated as “already paid” to vendors, run the account inquiry reports.

To remit the taxes, consult your accountant with the information in this paper. Then create a bill in AP, code it to the correct ledger account and pay the bill.

Remember, the timing of when you wish to remit your taxes may differ from what the Sales Tax report and ledgers show.

The management system is an accrual based system.