The GST report is for a period - usually two monthly. It involves all the transactions over that time. The balance sheet is at a given date. The GST balance includes all GST transactions from the first day up until that date.

So if a transaction was dated wrongly, it can throw things out. For example, if a June payment was dated in April, or a 2013 transaction was dated 2012, it will affect the balance sheet, but will not appear in the GST return in most systems.

Similarly if the March return is not paid until 7 May, it will throw out the GST balance for those on monthly GST.

Of course some GST payments may not have been coded correctly. For example if you pay provisional tax with your GST returns, the whole payment may have been included as GST or provisional tax, instead of being split. Or if you have been charged interest or penalties and these have not been separated out that will also cause problems.

Beyond that the possibilities are virtually endless. One common problem is that some entries are only done as part of the end of year accounts. Where these include GST, they have to be adjusted in the GST returns. Some systems will do that for you - others require manual intervention.

Another common problem is where transactions are not matched off. It may be that you've been paid privately for an invoice, or you've paid a bill privately. In these cases you may have entered a journal to clear the bill or invoice - but the debtor or creditor may still show up, albeit with a nil balance. In this case you need to apply the payment to the invoice or bill to get it included in the GST return on a cash basis.

There are endless possibilities for variances. You can repeat the procedure for any GST return you've done to see the variance for a period. Note you should always rerun the GST report for the period rather than go off the old printed copy as things may have been entered after the report was printed.

Once things balance, you should find that they balance from then on. If they don't, then something has been added or subtracted in the current period (unless you've gone back and changed a prior period entry). But for most people, once reconciled, future periods should match.

A final thought - some people find after all is said and done a small variance of say $10 or so that isn't worth investigating. In that case you can adjust your GST return so it matches and then future occasions will also balance. In these cases you can show this as an adjustment, or simply adjust the payments figure.

We have a simple spreadsheet model which reflects this.

Incidentally, the most difficult part of investigating discrepancies is knowing what was in the original return. That's why everyone should take backup copies of the detailed reports at the time of preparing the GST return - usually in a spreadsheet to make it easier to compare with the new figures.