Projects:TimingVATSalesStorno/UserDocumentation

Introduction

Timing of VAT Booking for Sales Storno Invoices is a new OB extension module which allows a different timing of the VAT booking for the Storno sales Invoices.

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.

For more information, please take a look into the Forge projects related:

Timing of VAT Booking is an OB extension module which allows VAT booking at the time of Settlement/Payment booking rather than at the time of Invoice booking. For more information take a look here:
Timing of VAT Booking Forge project

Storno Invoices is an OB extension module which gets an invoice being reversed by the same posting logic with negative amounts. This way, posting an invoice and a storno invoice with the same information do not have any impact in accounting. For more information take a look here:
Storno Invoice Forge project

How to configure

In order to get a different VAT booking timing for an organization, there is a new check-box implemented at "Organization" level at the application path:
"General Setup || Enterprise || Organization || Organization", named "Post VAT in settlement":

• If the "Post VAT in settlement" check-box is switched on, the VAT posting/booking will take place at the sales payment booking
• If the "Post VAT in settlement" check-box is switched off, the VAT posting/booking will take place at sales invoice booking

A new Tax account named "Transitory Account" has been added at the application path:
"Financial Management // Accounting // Setup // Tax Rate - Accounting tab".

• The "Transitory Account" will only be used in case the "Post VAT in settlement" check-box is switched on for an organization.

Due to the fact that the accounting must be modified in order to get a different timing of VAT booking, the table "Invoice" must point to a specific "Accounting Template" in the application path:
"Financial Management // Accounting // Setup // General Ledger Configuration - Active Tables tab":

• Table = Invoice -> Accounting Template "Accounting Engine-Invoice"

And finally and 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 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.

How to use it

Let's say that there is an Organization "A1" which has been set up as "Post VAT in Settlement" as Yes in the application path:
"General Setup || Enterprise || Organization || Organization - Information tab"

The tax rate VAT 19% has been setup by including a Temporary account = 4750 at the application path:
"Financial Management || Accounting || Setup || Tax Rate || Tax - Accounting tab".
The VAT output account is 4803

A sales invoice is entered for that organization at the application path:
"Sales Management || Transactions || Sales Invoice || Header", by following below main steps:

• on the header tab, select an org unit = A1, a business partner, document type = AR Invoice
• on the lines tab, enter a sales order line and:
  • select a product, amount = 4.000,00 and the VAT 19% tax rate
• 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
• 4803 - VAT output account (sales tax)
• 4500 - VAT Transitory Account
• Bank - a bank account

Sales Invoice posting will look like:

FaLL - 5230 4.000,00
FaLL - 4500 760,00

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

Bank - FaLL 4.760,00
4500 - 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.

Sales Storno Invoice posting will look like:

FaLL - 5230 -4.000,00
FaLL - 4500 -760,00

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

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