January 2007 (02)
How to Check your VAT


We often have queries regarding VAT that usually arise from a lack of understanding on how to use the VAT reports that are included with EXACT accounting.
VAT processing is really very simple and should be done as a matter of course, preferably every month.
Why do we say that, even though the VAT period spans two months? It is because if you make it part of your monthly routine you will be less likely to forget to do it and because checking one month's transactions is easier to do (and correct if there was an error) than trying to do two months.
The biggest sources of errors occur when:
a ] the VAT returns are submitted without being checked and
b] where transactions are posted into a period for which the VAT returns have already been submitted. This is why we recommend closing your Customers, Suppliers and Ledger accounts at the end of each month after all transactions have been carried out.

The VAT checking procedure is as follows:

1] Complete the processing of Customers invoices, Suppliers invoices and Journal entries for the month:
2] Go to [General Ledger][Reports][Vat Report] and print out the Detailed VAT report
You will see that there is a sumary of how to check your VAT in a yellow screen above the report selection area, as follows:
1] Verify the VAT on sales against the summary invoices report spanning the same period.
2] VAT on purchases needs to be checked carefully for operator data entry errors.
3] VAT on the total sales invoice 'round down' amount must be processed manually.

3] Follow the instructions above: The summary invoice report is found in [Customers][Reports].
Data entry errors are errors such as claiming VAT on purchases such as fuel, travel, non-vattable items or items purchased from non-registered vendors.
4] Once you are satisfied that the transactions are correct, close the debtors and vendors accounts [Periodic processes][End of Month] as well as the ledger [General Ledger][Maintenance][Close Ledger Period] in order to prevent any operator from inadvertently processing a transaction that has VAT implications to the period you have just processed.

That's it!

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