Projects:TimingVATSalesStorno/Functional Specification

Contents 1 Overview & Justification 1.1 Purpose 1.2 Overall Information 1.3 Scope 1.4 Justification 2 Functional Requirements 2.1 Configuration 3 Design & Technical consideration 3.1 Design consideration 3.2 Technical constraints 3.3 Technical Requirements 4 Users & business process description 4.1 User goals 4.2 User Roles and Personas 4.3 Business process diagram 4.4 Business scenario/s 4.4.1 Scenario - Storno Sales Invoice 4.5 Assumptions & Dependencies 4.5.1 Assumptions 4.5.2 Dependencies 5 User interface 5.1 New User Interface 5.2 User interface change 6 License 6.1 License code description

Overview & Justification

Purpose

The purpose of this document is to describe the Functional Specification for an extension module to be developed in OB ERP version 2.50 called "Timing of VAT Booking for Storno Sales Invoices".

Overall Information

• Name: Timing of VAT booking for Sales Storno Invoices
• Description: This module allows a different timing of the VAT booking for the Storno sales Invoices.
• Help: A storno invoice is a credit invoice which posting is the same as an invoice posting but with negative amounts. A different timing of the VAT booking implies that the VAT is booked in a transitory account while posting an invoice, in order to be later on reversed and booked in the corresponding VAT account, at invoice payment/settlement.
  If we use a Sales Storno Invoice to credit a Sales Invoice for which the VAT amount was booked to a transitory account the accounting information would be wrong.
  This module allows Storno Sales Invoices booking by using the Timing of VAT booking feature as well without any impact on accounting.
• License: Openbravo Public License

Scope

This module forms part of the booking process flow required by German Universities and describes the booking process for VAT.

Justification

German Universities consist of:

1. entities that belong to the Public Sector.
   1. Booking of purchase invoices in the Public Sector adds VAT to expenses because the Public Sector is not allowed to offset input tax.
   2. VAT is not booked on a separate account, but must be tracked for reporting purposes.
   3. A Public Sector entity of a University is an accounting unit and calculates it's own balance sheet, but also a consolidated balance sheet including the sub-entities, except internal bookings and booking related to other entities (intra-organizational booking).
2. entities which operate like a commercial business = CB ("BgA" = "Betrieb gewerblicher Art").
   1. CB entities must book VAT (and can offset input tax).
   2. Each CB is an accounting unit and calculates its own balance sheet.
   3. Some CBs are not included in the consolidated balance sheet of the University as a whole.

The booking of VAT (for the CB parts of Universities) belonging to sales invoices could take place at one or two different points in the processing of a sales invoice.

This must be controlled by an Invoice/Settlement Tax Accounting ("Soll/Ist-Versteuerung") switch. The switch setting is valid for the university as a whole.

1. Invoice Tax Accounting = VAT is booked to the VAT Output Account at the same time of the booking of the invoice. This is the default setting.

1. Settlement Tax Accounting' = VAT is booked to a VAT Transitory Account at the same time of the booking of the invoice. VAT is reversed from the VAT Transitory Account and booked to the VAT Output Account at the same time of the booking of the settlement.

Functional Requirements

Configuration

• In order to get a different VAT booking timing for a commercial unit, a new check-box must be implemented at "Accounting Unit" level (Organization) at the application path: "General Setup || Enterprise || Organization || Organization", named "Post VAT in settlement":
  • If "Post VAT in settlement" check-box is switched on, VAT posting will take place at sales settlement booking
  • If "Post VAT in settlement" check-box is switched off, VAT posting will take place at sales invoice booking

• Besides, a new Tax account named "Transitory Account" must be added at the application path: "Financial Management // Accounting // Setup // Tax Rate - Accounting tab".
  • Transitory Account will only be used in case "Post VAT in settlement" check-box is switched on.

• due to the fact that the accounting must be modified in order to get a different timing of VAT booking, the below table must point to a specific "Accounting Template" at the application path: "Financial Management // Accounting // Setup // Accounting Schema - Account Schema Tables tab":
  • Table = Invoice - Accounting Template "Accounting Engine-Invoice"
• Due to the fact that the "Sales Storno Invoice booking" needs to change in order to allow a different timing of VAT booking, it is also required a new accounting template for the "Storno Sales Invoice" Document category of the document C_Invoice Table, Documents tab:
  • "Document Category" - Storno Sales Invoice
  • "Accounting Template" - Storno with Timing of VAT support
  • "Allow negative" check-box must be switch on, otherwise the accounting entry will be wrong.

Storno Purchase Invoice Document category should remain as defined (linked to the Accounting Template "Storno Documents Posting Logic".

Design & Technical consideration

Design consideration

Technical constraints

Technical Requirements

Users & business process description

User goals

Automatic booking of VAT at different timing for Storno Sales Invoices.

User Roles and Personas

Accountant: Stamps a paper document (for example a Sales Storno Invoice) and indicates how that document should be booked, including the org units.

Business process diagram

N/A

Business scenario/s

For this scenario "Accounting unit BgA" is the entry of the specific orgunit in the ad_org_id field.

Scenario - Storno Sales Invoice

A sales invoice has to be booked at the application path: "Sales Management || Transactions || Sales Invoice || Header", by following below main steps:

• on the header tab, select an org unit = BgA, business partner, etc.
• on the lines tab, enter a sales order line and:
  • select a product, amount = 4.000,00 + VAT = 19%,
• Complete and Post the sales invoice

The accounts which could be involved are listed below:

• 5230 - account for income
• FaLL - the account of the business partner for receivables
• VaLL - the account of the business partner for payables
• 4803 - VAT output account (sales tax)
• Temp - VAT Transitory Account
• Bank - a bank account

If the Organization is setup as Post VAT in Settlement = NO, the posting of this invoice must result in the following G/L entries

FaLL - 5230 4.000,00
FaLL - 4803 760,00

On receiving the payment, posting must result in the following G/L entries

Bank - FaLL 4.760,00

If the Organization is setup as Post VAT in Settlement = YES, the posting of this invoice must result in the following G/L entries

FaLL - 5230 4.000,00
FaLL - Temp 760,00

On receiving the payment, posting must result in the following G/L entries

Bank - FaLL 4.760,00
Temp - 4803 760,00

Later on, the above sales invoice needs to be storno for whatever kind of reason.
The "original" sales invoice must be linked to the "storno" sales invoice, while entering the storno sales invoice in the system.

If the Organization is setup as Post VAT in Settlement = NO, the posting of this invoice must result in the following G/L entries

5230 - VaLL 4.000,00
4803 - VaLL 760,00

On returning the payment, posting must result in the following G/L entries

VaLL - Bank 4.760,00

(to be defined as Storno invoices should also work with APRM)

If the Organization is setup as Post VAT in Settlement = YES, the posting of the storno sales invoice must result in the following G/L entries

5230 - VaLL 4.000,00
Temp - VaLL 760,00

On returning the payment, posting must result in the following G/L entries

VaLL - Bank 4.760,00
4803 - Temp 760,00

(to be defined as Storno invoices should also work with APRM)

Assumptions & Dependencies

Assumptions

To be added.

Dependencies

To be added.

User interface

New User Interface

n/a

User interface change

New fields in the Organization Dialog:

• "Post VAT in Settlement" checkbox, default value = NO

New field in the Tax Rate accounting tab:

• "Transitory Account", default value = empty

License

License code description

Openbravo Public License