Topic: VAT on purchase invoice

I can't seem to get the vat (sales tax) to show up when I enter a suppliers invoice.

The tax line of 15% is there but is not calculated?

How do you do sales tax (VAT in uk) on purchase or sales invoices with FrontAccount?

Re: VAT on purchase invoice

You shouldn't have any problems with that. Check that the Items have the correct Item Tax setup.

/Joe

Re: VAT on purchase invoice

I have to set the purchase tax in 'items'? Could you give me a clue

Re: VAT on purchase invoice

Hi Joe,

What I meant was if i enter a suppliers invoice, i enter the net amount and expect the vat to appear in the vat line-but it just stays at zero?

So that's a not a sales invoice of my company going out-it's a purchase invoice coming in as an expense.

I can't see what 'items' would have to so with it-surely that's for sales?

Re: VAT on purchase invoice

Hi,

I think am having the same problem.

I buy a lot of external services, many on monthly repeat orders.  Setting up Items, then PO's for those items, having them 'delivered' and then creating a supplier invoice every month for every service would be a real pain.

If I enter the supplier invoice directly and use GL entries, then I also get a VAT value of 0.00.

How do I create a supplier invoice that includes VAT without going through the above chain?

Also, (currently for me less of a problem) I think the symantics with VAT are wrong.  In the UK we have several VAT rates; a supplier may supply items with different VAT rates on one invoice so the VAT has to be calculated per line item and summed.

Re: VAT on purchase invoice

Yes, we are aware of this problem. We might need some improvements to this in release 2.2. I will discuss this with my co-developer when he is back in office again.
At the meantime you can enter the tax-accounts and taxes yourself on separate lines.
I saw your reports on Mantis too. We will try to solve them asap.

/Joe

Re: VAT on purchase invoice

Thanks for the reponse, Joe.

I initially thought FA was useless for my purposes, then I discovered the Quick entry method on the supplier invoice which *only* appears if you set up a quick entry correctly (IMO this should not be hidden but inactive somehow). Anyway, once again FA is a possible candidate.

I've looked at GNUCash, FrontAccounting and PhreeBooks and FA seems to be the simplest and best thought out, even if its UI is a little clunky.

(phreebooks seems to be only useful if you have exactly the same setup as the author, are in the USA and are a genius at php - I am none of these)

How difficult would it be to allow the quick entry to have the following additions:
1: Allow the line memo field to be editable?
2: Allow the VAT to be calculated per line

I think what I am asking for is a seperate popup form that allow line editing, which then populates the supplier invoice GL entries.

e.g. I want to enter paid invoices for a supplier (RS components in this case) I have an account with them so one payment covers a number of invoices and is spread across multiple projects.  My payment needs to be broken down line by line for each past supplier invoice, each project (dimension), and each tax type.
If the above two changes were made, then this would be possible.

For example, one payment to RS might look like:
Account:  Books and media
Dimension: Project X
Price: £34.99
Unit: Each
QTY: 1
Memo: Invoice 12345
VAT: none
Total: £34.99
---
Account:  Stock Components
Dimension: Project Y
Price: £0.02
Unit: Each
QTY: 100
Memo: Invoice 12346
VAT: 15%
Total: £2.30

Payment (net):36.99
Accumulated VAT:0.30
Payment total:37.29

I'm a reasonablly good programmer and fancy a crack at this, but have had little experience with PHP (I'm really an electronics engineer and use C/C++, python and assembler) and would need some pointers which bits of the code to dig into.

Looking at the database, it seems I only need to create a number of  supp_invoice_items records and a single supp_trans record, is this correct?

If I were to put my faith into FA, how likely is it that later changes to the database could mess up any past entries entered manually in the way you suggest.


Thanks,
Jason

Re: VAT on purchase invoice

Hello Jason,

The Quick Entries is based on the normal Journal Entry Lines from the table 0_gl_trans. So when you build these lines correctly the VAT part occupies a transaction line of its own.
Internally the tax details is updated automatically, so your vat report/inquiry should report correctly.
It is, however, important that the Sales/Purchase Tax Accounts are set up correctly in Tax Setup. And you should use a Sales Tax Account for each vat rate you use. Similar on the Purchase Tax side.
We have no need for saving the tax part on the transaction line.

/Joe

Re: VAT on purchase invoice

I'm starting to understand how it should be used now.

I was thinking of payments rather than invoices, one payment against a montly account statement covers many invoices, I was expecting to be able to enter all the invoices from a statement in one go, not one at a time.

OK, I can live with that.

But, as far as I can see, the problem of tax in the line is still there, at least for me.

If I simply state that 15% of a given supplier invoice total is tax I stand a good chance of being wrong as each line item in the invoice is taxed separately so the calculation based purely on the total will be incorrect. Now to be honest I rarely order zero or reduced vat items (e.g. food and books are a classic example, but the list is huge) but I'm sure others must face the same problem?

Re: VAT on purchase invoice

In release 2.2 you can allocate the payments directly. I guess you can see this on the demo 2.2 CVS,

/Joe

Re: VAT on purchase invoice

Sounds good,

From what you have shown me I think FA does suite our purposes; that of a simple, web based mySQL double entry accounts package.   I have taken the plunge and started entering cleanly this financial year.  We are going to have to be creative with mapping our (currently excel based) accounts to the way FA does things, but from our research so far this seems to be true for any package.

Well done with what you have achieved so far and keep up the good work.  I'm no PHP programmer, but I'd be happy to do what I can to help, if only beta test.

What is the timeline for 2.2?

I looked on the sourceforge CVS and I don't see a branch for the 2.2 development, is it available?

Re: VAT on purchase invoice

The CVS for 2.2 is tagged 'unstable'. It is not fully merged with the last changes from 2.1.4. The merge only happens when minor releases are shipped.
We expect a shipment for the 2.2 RC in about one month, Though we may move the Item Tax Types to the other tax setup and perhaps rewrite it a bit. Janusz has announced this and I agree. It would be easier to understand it this way. So please expect up to 2 months.

/Joe

Re: VAT on purchase invoice

I was very surprised that the supplier invoice form doesn't automatically calculate the VAT and set the default account.

When I get an incomming invoice for let's say a Prinshop I do enter it as a supplier with the VAT group and the Purchase Account.  Then I enter the Supplier Invoice form and it doesn't take over the defaults for the Purchase Account, neither the VAT account.  So now I have to remember the purchase account myself and add an extra line with the VAT amount. This decreases efficiency and increases human typo mistakes.

I would really appreciate if the values in the supplier record can be used as the defaults for the supplier invoice to set the VAT and the purchase account.

Re: VAT on purchase invoice

If you have setup your supplier and items with correct tax groups/item tax types and correct purchase account, there shouldn't be any problems getting the correct tax calculated automatically for you.

/Joe

Re: VAT on purchase invoice

True for invoices with item lines. And I'm only using items for the core activities.

However I was more thinking of the non-core activities, like a printshop invoice, or bank costs, or rental bills, or lunch receipt.

Then it would be great to select the printshop, enter the printshop invoice number and total amount, then let FrontAccounting calculate the VAT and prompt with the default account for this printshop (something like 'promotion costs').

I noticed the quick entry. This still looks to fixed. I would really prefer to have a calculated VAT and a default purchase account. Simular to line item invoices, except then based on the supplier fields: VAT and Purchase Account.

Re: VAT on purchase invoice

For gl items, you should create Quick Entries for your various non items related entries. This is the best way of doing this.

/Joe

Re: VAT on purchase invoice

shopimport wrote:

I noticed the quick entry. This still looks to fixed. I would really prefer to have a calculated VAT and a default purchase account. Simular to line item invoices, except then based on the supplier fields: VAT and Purchase Account.

Yes, quick entry is exactly for this kind of calculations. We cannot do it automatically on every GL line entered in purchase invoice just because different type of 'non-core' purchases can have various tax item rates. E.g. two different rates are used in most countries using VAT regulations.

Janusz

Re: VAT on purchase invoice

Indeed the quick entry is handy for repeating simular bookings although I didn't use it yet (just noticed).

Still I would then like to know why I need to enter the VAT group for a supplier if it cannot be used for incoming supplier invoices? Where is it used?

It's true that various VAT rates are used. In the Netherlands we have also two rates. This is exactly the reason to keep more control on it. I would still love to see  the default calculated TAX value with a possibility to change. And if I may dream more... a checkmark to indicate whether the entered values are including or excluding tax as this will change the tax calculation.  I know an open source package doing this which I used to use since recently.

Re: VAT on purchase invoice

Well,. VAT group IS used for incoming invoices for every item included. I think you do not understand right how the tax system in FA works, but you can test it. Please observe how tax is calculated for items purchased from different suppliers for demo data. As example company use USD as home currency Junk Beer from Denmark is in Tax Exempt group, while Lucky Luck is domestic supplier. Therefore VAT is calculated for items form Lucky Luck, but not form Junk Beer.

Another thing is costs entered via GL lines on supplier invoice. Regardless of type of supplier, every individual GL line can have different nature. So even for tax exempt supplier the costs can have various tax rates related to every one GL line. If you do not want calculate it manually you should create quick journal entries for all tax schemes you wish to use.

The only constraint in purchasing is currently assumption that all suppliers us pricelists without VAT (this obviously does not mean they do not use tax, simply the tax is adde and not included). This constraint was here since the start of original system FA derives from, and unfortunately it wasn't removed so far. Originally the application was designed for b2b companies which usually use only prices stated without tax.

Finally I have to say that adding GL lines on purchase invoices was introduced to enable recording additional purchase costs. The best solution for 'non-core' purchases would be separated page with a little another ui structure, not needing selecting from predefined inventory list. FA still lack such a page, but adding manual change for tax rates in GL lines is in no way improvement. And in no case better solution than use of predefined quick journal entries.

Janusz

Re: VAT on purchase invoice

Well, it is possible to have a supplier where you buy items to go into the stock and other cost things that are not going into the stock.
This is the reason why both these options are in the Supplier Invoice/Credit note.
Normally there should be no problems having these operations in the same form. It has been here for 3-4 years, without any complains.

/Joe

Re: VAT on purchase invoice

Well, I'm having a similar problem with purchase tax.

When I enter a supplier invoice the tax field fails to calculate and remain zero. The sales field on the sales invoice calculates alright posting the VAT element into its sales tax liability account and that is really cool.

But the purchase tax is really a pain for me since I manually calculate the VAT and use journal entry to post the tax element into its relevant account.

I would deeply appreciate any help to fix this. I'm running on version 2.2.8

Re: VAT on purchase invoice

If tax is properly posted for sales invoice but this is not the case for supplier invoice (providing the same item is sold and purchased), the supplier used for purchase invoice has tax group selected which is fully tax exempt.

Janusz

Re: VAT on purchase invoice

This is not really the same item purchased for resale, in fact most of my purchase lines are expenses, even though others are for resale. I discovered the quick entry yesterday and realised that it does calculate the purchase tax alright.

I'm very sure "tax group"  selected is not fully tax exempt, cos "exempt selected items do not show the tax field at all, but in my case, the fields are shown but just wouldn't  calculate.

Please throw more light on creating quick entries with tax exempt items. I might be better off using the quick entries for all my supplier invoices since I don't make use of POs now.

Thanks.

Re: VAT on purchase invoice

If I understand from your post #22, are you saying that the system automatically fails to calculate purchase VAT (from the same item sold) just to account for the Purchase tax reclaimable?

Cos, I have a tax liability account named Sales tax to which the sales invoices entered credits the VAT element and further credits the net to the sales account.

On the other hand, I also have a current asset purchase tax account to which purchase tax is supposed to be debited and the net purchases figure further debited to the relevant purchases account.

The sales invoice aspect is done perfectly but the purchases aspect is not done because the purchase invoice tax is not calculated (though the field shows up in the form and appropriate tax group of 15% selected) in oder to post the tax element to the respective purchase tax account. I hope you understand my problem.

Re: VAT on purchase invoice

If I understand from your post #22, are you saying that the system automatically fails to calculate purchase VAT (from the same item sold) just to account for the Purchase tax reclaimable?

No. System calculate taxes according to your setup . If you select tax group which does not contain taxes, no tax will be calculated.

Please read the related wiki page to learn how the tax system works in FA. It works exactly the same for sales and purchases (despite the taxes are posted to credit or debit GL side). Taxes calculated depend both on item involved (by Item Tax Type) and customer/ssuplier (by Tax Group).

Janusz