Understanding VAT/Sales Tax in the NEOSYS finance module - Revision history

Arvind: /* Invoice/Credit notes Journal */

2023-10-31T11:52:10Z

Invoice/Credit notes Journal

← Older revision		Revision as of 11:52, 31 October 2023
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	The amount charged to client is debited to the Client a/c with the VAT included in this amount. The amount excluding VAT is credited to the Income a/c and the VAT amount is credited separately to the Output VAT Control a/c.		The amount charged to client is debited to the Client a/c with the VAT included in this amount. The amount excluding VAT is credited to the Income a/c and the VAT amount is credited separately to the Output VAT Control a/c.

	The cost to Supplier is recorded as a debit to the Cost a/c and the Accrual account is temporarily credited here until the amount is actually ~~received from~~ the Supplier. These amounts exclude VAT paid to the Supplier.		The cost to Supplier is recorded as a debit to the Cost a/c and the Accrual account is temporarily credited here until the amount is actually paid to the Supplier. These amounts exclude VAT paid to the Supplier.

	====Purchase Invoice/Media Purchase Invoice Journal====		====Purchase Invoice/Media Purchase Invoice Journal====

Gregory: /* VAT in NEOSYS */

2019-10-28T07:35:08Z

VAT in NEOSYS

← Older revision		Revision as of 07:35, 28 October 2019
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	*One tax code is used per schedule. Line items with a different tax code should be entered in a separate schedule.		*One tax code is used per schedule. Line items with a different tax code should be entered in a separate schedule.
	*A default tax code can be set by NEOSYS so that users need ~~not~~ enter the tax code each time. For e.g. most clients in Dubai use OSD(VAT Std. Output 5%) as default.		*A default tax code can be set by NEOSYS so that users don't need to enter the tax code each time. For e.g. most clients in Dubai use OSD(VAT Std. Output 5%) as default.
	*VAT tax% is applied to the total net amount of the schedule and not per vehicle line.		*For assigning a default tax code per client or supplier see finance module section below.
			*VAT tax% is applied to the total net amount of the schedule and not the net amount per vehicle line.
	*The “Tax” column in the schedule file should not be used as invoicing will be blocked. Please use ‘Other’ column if necessary to use a different tax. (For e.g. you can enter “10% tax” in ‘Other’ column, which will be displayed in the printouts as well)		*The “Tax” column in the schedule file should not be used as invoicing will be blocked. Please use ‘Other’ column if necessary to use a different tax. (For e.g. you can enter “10% tax” in ‘Other’ column, which will be displayed in the printouts as well)
	*When issuing a media booking order “Add Standard Tax” must be chosen to display 5% VAT in the booking order printout.		*When issuing a media booking order “Add Standard Tax” must be chosen to display 5% VAT in the booking order printout.
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	*In Estimate or Production Orders, you can enter different tax codes per line.		*In Estimate or Production Orders, you can enter different tax codes per line.
	*NEOSYS can set a default tax code which will appear automatically in the Tax Code field. Any line items that don’t specify a tax code will use the default tax code defined at the bottom.		*NEOSYS can set a default tax code which will appear automatically in the Tax Code field. Any line items that don’t specify a tax code will use the default tax code defined at the bottom.
			*For assigning a default tax code per client or supplier see finance module section below.
	*Estimate use tax codes that begin with “O” to apply VAT tax on Outputs. (eg: OSB- Bahrain Std. VAT on Outputs)		*Estimate use tax codes that begin with “O” to apply VAT tax on Outputs. (eg: OSB- Bahrain Std. VAT on Outputs)
	*Purchase orders use tax codes that begin with “I” to apply VAT tax on Inputs. (eg: IS- Std. VAT on Inputs)		*Purchase orders use tax codes that begin with “I” to apply VAT tax on Inputs. (eg: IS- Std. VAT on Inputs)
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	*The tax amount in intercompany transactions remain in the originating company making Tax audits easier. (http://userwiki.neosys.com/index.php/Finance_FAQ#Why_do_VAT_amounts_stay_in_originating_company_accounts.3F)		*The tax amount in intercompany transactions remain in the originating company making Tax audits easier. (http://userwiki.neosys.com/index.php/Finance_FAQ#Why_do_VAT_amounts_stay_in_originating_company_accounts.3F)
	*Tax code will be filled automatically on generated journals.		*Tax code will be filled automatically on generated journals.
			*For assigning a default tax code per client or supplier, go to the 'Chart of Accounts' file, choose which ledger the client or supplier is in and enter the default tax code per account in the 'Tax Code" field.

	====Reports in NEOSYS====		====Reports in NEOSYS====

Joel: /* Accounting entries */

2019-07-29T07:05:16Z

Accounting entries

← Older revision		Revision as of 07:05, 29 July 2019
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	The totals of the debits and credits for any transaction must always equal each other, so that an accounting transaction is always said to be "in balance."		The totals of the debits and credits for any transaction must always equal each other, so that an accounting transaction is always said to be "in balance."

	====~~'''~~Invoice/Credit notes Journal~~'''~~====		====Invoice/Credit notes Journal====

	When you issue a Media invoice/Credit note or invoice a Job estimate, the automatic entries are generated in the INV or INP journal, respectively.		When you issue a Media invoice/Credit note or invoice a Job estimate, the automatic entries are generated in the INV or INP journal, respectively.
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	The cost to Supplier is recorded as a debit to the Cost a/c and the Accrual account is temporarily credited here until the amount is actually received from the Supplier. These amounts exclude VAT paid to the Supplier.		The cost to Supplier is recorded as a debit to the Cost a/c and the Accrual account is temporarily credited here until the amount is actually received from the Supplier. These amounts exclude VAT paid to the Supplier.

	====~~'''~~Purchase Invoice/Media Purchase Invoice Journal~~'''~~====		====Purchase Invoice/Media Purchase Invoice Journal====

	The below entries are generated automatically in PUR journal when creating a Purchase order/issuing a Purchase invoice.		The below entries are generated automatically in PUR journal when creating a Purchase order/issuing a Purchase invoice.
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	Then, the cost to Supplier is debited to Cost a/c and the VAT amount is debited separately to the Input VAT control account. Correspondingly, total amount including VAT is credited to the Supplier a/c.		Then, the cost to Supplier is debited to Cost a/c and the VAT amount is debited separately to the Input VAT control account. Correspondingly, total amount including VAT is credited to the Supplier a/c.

	====~~'''~~Receipt Journal~~'''~~====		====Receipt Journal====

	An REC journal entry is manually entered when payment from the Client is received.		An REC journal entry is manually entered when payment from the Client is received.
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	Once the payment from the client is received, the Agency will credit the amount to the Client a/c and debit the Bank a/c.		Once the payment from the client is received, the Agency will credit the amount to the Client a/c and debit the Bank a/c.

	====~~'''~~Payment Journal~~'''~~====		====Payment Journal====

	A PAY journal entry is manually entered when the payment has been made to the Supplier.		A PAY journal entry is manually entered when the payment has been made to the Supplier.
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	Once the payment has been made to the Supplier, the amount is credited to the Bank a/c and debited to the Supplier a/c.		Once the payment has been made to the Supplier, the amount is credited to the Bank a/c and debited to the Supplier a/c.

	====~~'''~~Payment Journal~~'''~~====		====Payment Journal====

	At the end of each VAT period, Agencies have to pay the Govt. the difference of the VAT received from Client and VAT paid to Supplier.		At the end of each VAT period, Agencies have to pay the Govt. the difference of the VAT received from Client and VAT paid to Supplier.

Joel: /* Accounting entries */

2019-07-29T07:04:16Z

Accounting entries

← Older revision		Revision as of 07:04, 29 July 2019
Line 61:		Line 61:
	The totals of the debits and credits for any transaction must always equal each other, so that an accounting transaction is always said to be "in balance."		The totals of the debits and credits for any transaction must always equal each other, so that an accounting transaction is always said to be "in balance."

	'''Invoice/Credit notes Journal'''		===='''Invoice/Credit notes Journal'''====

	When you issue a Media invoice/Credit note or invoice a Job estimate, the automatic entries are generated in the INV or INP journal, respectively.		When you issue a Media invoice/Credit note or invoice a Job estimate, the automatic entries are generated in the INV or INP journal, respectively.
Line 76:		Line 76:
	The cost to Supplier is recorded as a debit to the Cost a/c and the Accrual account is temporarily credited here until the amount is actually received from the Supplier. These amounts exclude VAT paid to the Supplier.		The cost to Supplier is recorded as a debit to the Cost a/c and the Accrual account is temporarily credited here until the amount is actually received from the Supplier. These amounts exclude VAT paid to the Supplier.

	'''Purchase Invoice/Media Purchase Invoice Journal'''		===='''Purchase Invoice/Media Purchase Invoice Journal'''====

	The below entries are generated automatically in PUR journal when creating a Purchase order/issuing a Purchase invoice.		The below entries are generated automatically in PUR journal when creating a Purchase order/issuing a Purchase invoice.
Line 93:		Line 93:
	Then, the cost to Supplier is debited to Cost a/c and the VAT amount is debited separately to the Input VAT control account. Correspondingly, total amount including VAT is credited to the Supplier a/c.		Then, the cost to Supplier is debited to Cost a/c and the VAT amount is debited separately to the Input VAT control account. Correspondingly, total amount including VAT is credited to the Supplier a/c.

	'''Receipt Journal'''		===='''Receipt Journal'''====

	An REC journal entry is manually entered when payment from the Client is received.		An REC journal entry is manually entered when payment from the Client is received.
Line 102:		Line 102:
	Once the payment from the client is received, the Agency will credit the amount to the Client a/c and debit the Bank a/c.		Once the payment from the client is received, the Agency will credit the amount to the Client a/c and debit the Bank a/c.

	'''Payment Journal'''		===='''Payment Journal'''====

	A PAY journal entry is manually entered when the payment has been made to the Supplier.		A PAY journal entry is manually entered when the payment has been made to the Supplier.
Line 111:		Line 111:
	Once the payment has been made to the Supplier, the amount is credited to the Bank a/c and debited to the Supplier a/c.		Once the payment has been made to the Supplier, the amount is credited to the Bank a/c and debited to the Supplier a/c.

	'''Payment Journal'''		===='''Payment Journal'''====

	At the end of each VAT period, Agencies have to pay the Govt. the difference of the VAT received from Client and VAT paid to Supplier.		At the end of each VAT period, Agencies have to pay the Govt. the difference of the VAT received from Client and VAT paid to Supplier.

Joel: /* Accounting entries */

2019-07-29T06:24:37Z

Accounting entries

← Older revision		Revision as of 06:24, 29 July 2019
Line 74:		Line 74:
	The amount charged to client is debited to the Client a/c with the VAT included in this amount. The amount excluding VAT is credited to the Income a/c and the VAT amount is credited separately to the Output VAT Control a/c.		The amount charged to client is debited to the Client a/c with the VAT included in this amount. The amount excluding VAT is credited to the Income a/c and the VAT amount is credited separately to the Output VAT Control a/c.

	The cost to Supplier is recorded as a debit to the Cost a/c and the Accrual account is temporarily credited here until the amount is actually received from the ~~supplier~~. These amounts exclude VAT paid to the ~~supplier~~.		The cost to Supplier is recorded as a debit to the Cost a/c and the Accrual account is temporarily credited here until the amount is actually received from the Supplier. These amounts exclude VAT paid to the Supplier.

	'''Purchase Invoice/Media Purchase Invoice Journal'''		'''Purchase Invoice/Media Purchase Invoice Journal'''

Joel: /* Accounting entries */

2019-07-29T06:23:10Z

Accounting entries

← Older revision		Revision as of 06:23, 29 July 2019
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	===Accounting entries ===		===Accounting entries ===

			Whenever an accounting transaction is posted, at least two accounts are always affected. One account is debited while the other is credited.

			The totals of the debits and credits for any transaction must always equal each other, so that an accounting transaction is always said to be "in balance."

	'''Invoice/Credit notes Journal'''		'''Invoice/Credit notes Journal'''

			When you issue a Media invoice/Credit note or invoice a Job estimate, the automatic entries are generated in the INV or INP journal, respectively.

	Client A/C Dr. + 126		Client A/C Dr. + 126
	Income A/c Cr. - 120		Income A/c Cr. - 120
	VAT Control A/C Cr. - 6		VAT Control A/C Cr. - 6

	Cost A/C Dr. + 100		Cost A/C Dr. + 100
	Accrual A/C Cr. - 100 (Schedule/Job A/C)		Accrual A/C Cr. - 100 (Schedule/Job A/C)

			The amount charged to client is debited to the Client a/c with the VAT included in this amount. The amount excluding VAT is credited to the Income a/c and the VAT amount is credited separately to the Output VAT Control a/c.

			The cost to Supplier is recorded as a debit to the Cost a/c and the Accrual account is temporarily credited here until the amount is actually received from the supplier. These amounts exclude VAT paid to the supplier.

	'''Purchase Invoice/Media Purchase Invoice Journal'''		'''Purchase Invoice/Media Purchase Invoice Journal'''

			The below entries are generated automatically in PUR journal when creating a Purchase order/issuing a Purchase invoice.

			A media Purchase invoice will have to be manually entered when you receive the Supplier invoice.

	Cost A/C Cr. - 100		Cost A/C Cr. - 100
	Accrual A/C Dr. + 100 (Schedule/Job A/C)		Accrual A/C Dr. + 100 (Schedule/Job A/C)

	Cost A/C Dr. + 100		Cost A/C Dr. + 100
	VAT Control A/C Dr. + 5		VAT Control A/C Dr. + 5
	Supplier A/c Cr. - 105		Supplier A/c Cr. - 105

			A reversal is first created to reverse the amounts which were debited to Cost a/c and credited to Accrual a/c when the Estimate invoice/Media invoice was issued.

			Then, the cost to Supplier is debited to Cost a/c and the VAT amount is debited separately to the Input VAT control account. Correspondingly, total amount including VAT is credited to the Supplier a/c.

	'''Receipt Journal'''		'''Receipt Journal'''

			An REC journal entry is manually entered when payment from the Client is received.

	Bank A/C Dr. + 126		Bank A/C Dr. + 126
	Client A/C Cr. - 126		Client A/C Cr. - 126

			Once the payment from the client is received, the Agency will credit the amount to the Client a/c and debit the Bank a/c.

	'''Payment Journal'''		'''Payment Journal'''

			A PAY journal entry is manually entered when the payment has been made to the Supplier.

	Bank A/C Cr. - 105		Bank A/C Cr. - 105
	Supplier A/c Dr. + 105		Supplier A/c Dr. + 105

			Once the payment has been made to the Supplier, the amount is credited to the Bank a/c and debited to the Supplier a/c.

	'''Payment Journal'''		'''Payment Journal'''

			At the end of each VAT period, Agencies have to pay the Govt. the difference of the VAT received from Client and VAT paid to Supplier.

			This is manually recorded in a PAY journal by debiting the VAT Payable a/c with the amount that you have to pay and crediting the same amount to the Bank a/c.

	VAT Payable A/c Dr. + 1		VAT Payable A/c Dr. + 1
	Bank A/c Cr. - 1		Bank A/c Cr. - 1

			This is assuming that the total VAT received from clients is higher than total VAT paid to suppliers. If the total VAT paid is higher than total VAT received, then the agency needs to receive from the govt. the difference of VAT paid and VAT received, which is recorded in a receipt (REC journal) as a debit to the Bank a/c and credit to the VAT payable a/c.

			At the end of the VAT period, after the above PAY/REC transaction is posted, ledger account report for accounts VAT input, VAT output and VAT payable accounts together should show a total balance of 0.

	===VAT in NEOSYS===		===VAT in NEOSYS===

Arvind: /* Reports in NEOSYS */

2018-12-06T12:45:52Z

Reports in NEOSYS

← Older revision		Revision as of 12:45, 6 December 2018
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	This report can be used to get VAT tax summary of all VAT items used in any period.		This report can be used to get VAT tax summary of all VAT items used in any period.

	You can cross-reference the Journal Audit report and the Tax/VAT return report to ~~see if~~ the amounts agree with each other~~, which they always should~~.		You can cross-reference the Journal Audit report and the Tax/VAT return report to ensure that the amounts agree with each other.

Joel: /* Reports in NEOSYS */

2018-11-27T11:43:33Z

Reports in NEOSYS

← Older revision		Revision as of 11:43, 27 November 2018
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	This report will give a brief summary of VAT items used in each journal, a VAT analysis for each journal and an analysis on the Grand Total.		This report will give a brief summary of VAT items used in each journal, a VAT analysis for each journal and an analysis on the Grand Total.

	*[[~~TAX~~/~~VAT_Statement~~\|Tax/VAT Return Report]]		*[[Tax/VAT_Return_Report\|Tax/VAT Return Report]]
	This report can be used to get VAT tax summary of all VAT items used in any period.		This report can be used to get VAT tax summary of all VAT items used in any period.

	You can cross-reference the Journal Audit report and the Tax/VAT return report to see if the amounts agree with each other, which they always should.		You can cross-reference the Journal Audit report and the Tax/VAT return report to see if the amounts agree with each other, which they always should.

Joel: /* Reports in NEOSYS */

2018-11-27T11:36:17Z

Reports in NEOSYS

← Older revision		Revision as of 11:36, 27 November 2018
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	*Ledger account/ Statement of Account		*Ledger account/ Statement of Account
	You can use this report to check the balance of the different VAT accounts: VATCI, VATCO and VATP.		You can use this report to check the balance of the different VAT accounts: VATCI, VATCO and VATP.

	*Journal Audit Report		*Journal Audit Report
	This report will give a brief summary of VAT items used in each journal, a VAT analysis for each journal and an analysis on the Grand Total.		This report will give a brief summary of VAT items used in each journal, a VAT analysis for each journal and an analysis on the Grand Total.
	*Tax/VAT Return Report
			*[[TAX/VAT_Statement\|Tax/VAT Return Report]]
	This report can be used to get VAT tax summary of all VAT items used in any period.		This report can be used to get VAT tax summary of all VAT items used in any period.

	You can cross-reference the Journal Audit report and the Tax/VAT return report to see if the amounts agree with each other, which they always should.		You can cross-reference the Journal Audit report and the Tax/VAT return report to see if the amounts agree with each other, which they always should.

Joel: /* Making tax columns appear on the Journals */

2018-11-27T08:02:58Z

Making tax columns appear on the Journals

← Older revision		Revision as of 08:02, 27 November 2018
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	==== Making tax columns appear on the Journals ====		==== Making tax columns appear on the Journals ====

	In order to get the VAT column in the journal entry page, make sure ~~Comapny TRN~~ is entered in the Company file.		In order to get the VAT column in the journal entry page, make sure Tax Registration number is entered in the Company file.

	In Journal Setup make sure the tax columns are suitably titled for the relevant journals.		In Journal Setup make sure the tax columns are suitably titled for the relevant journals.