Reconciliation tab

The heart of the system. Three sub-tabs: GST, Wages/PAYGW, and PAYG Instalments.

GST

Two reconciliations are performed.

Top-down reconciliation

Takes accrual revenue from the P&L and reconciles down to cash-basis GST collected. Click through to see the exact account and general ledger line for each row.

This reconciliation also handles asset disposals. The engine identifies movements in fixed assets and surfaces the amount — but the preparer must confirm or edit this figure, because asset disposals can be processed in a variety of ways and the system can’t reliably surface every permutation automatically.

The top-down GST collected result is then compared to the sum of GST on income amounts from the tax codes in Xero. Any variance is highlighted — usually the result of a bookkeeping process such as using GST on income on a negative income item.

The same methodology is applied on the expense side: total expenses from the P&L are adjusted to get to creditable acquisitions, then compared to the sum of GST tax codes. Variances are highlighted.

GST control account reconciliation

Takes the GST balance per the balance sheet, adjusts for cash basis where required, and produces the expected GST for the period. This is compared to the expected GST from the tax codes.

Any variance is decomposed into its parts:

• Missing ATO payments — where the engine can’t find ATO payments matching the prior period liability, it surfaces this for investigation
• Unfiled amounts — transactions that have changed, been edited, or voided in a prior period after that period’s BAS was marked as lodged, identified line by line

For unfiled amounts: check each one and decide whether to include it as an adjustment in this period (within adjustment thresholds — mark as Commit to BAS), or leave it uncommitted if it’s outside the thresholds and needs a prior period amendment instead.

Wages/PAYGW

Compares the general ledger wages amount to the W1 amount from the payroll module. Where there’s a difference, the reconciliation surfaces what the differences are made up of — salary sacrifice reducing W1, allowances not subject to W1, and so on.

A month-by-month YTD table is maintained across BAS and IAS. If you’re starting this client mid-year, WatsonOS will ask you to confirm the prior months’ wages and W1 figures as lodged with the ATO. Once you’re up and running, this table is maintained and updated automatically as activity statements are marked as lodged.

If a pay run is posted in a prior period after that period’s activity statement has been marked as lodged, WatsonOS flags it — an amendment to that period’s activity statement will be required.

PAYG Instalments

Allows you to calculate a potential variation based on current-period profitability.

On the first quarter of the year, you’ll be asked to select the PAYG Instalment method and tax rate. Enter the ATO instalment amount, then either accept it or compute a varied amount. Whichever you choose is confirmed and added to the BAS label.