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Release 380: VAT processing from Prepayments (Russian) - Part II

Background

In Release 360, a new functionality "Prepayment tax" was implemented for Russian legislation, whereby users could book VAT entries for prepayment received. This practice was to ensure that companies declare VAT for all cash received, irrespective of whether goods/ services were delivered. A new menu path was made available for this application, i.e. Finance / Accounts receivable / Prepayment tax . For more information, please refer to release note VAT processing from Prepayments (Russian).

However, currently users are not able to process VAT entries for transactions originating from partially reconciled prepayments. For example, user registers a cash receipt and partially reconciles with an invoice, whereby the receipt more than invoice. During matching, option "Balance" is selected to process the amount difference. When user launches the "Prepayment tax" application, user is not able to process VAT entry for the balance amount.

What has been changed

In Release 380, the "Prepayment tax" application has been adjusted to display all cash receipts which have not been matched with any invoices, including cash receipts which have been partially matched and has a balance which has yet to be processed for VAT. If receipts are matched together without any invoices, the resulting balance is also displayed in the "Prepayment tax" application for VAT processing.

In summary, the following receipts will be displayed in the "Prepayment tax" application:

• Receipts which have not been matched with any invoices.

• Receipts which have been partially matched with invoices, resulting in an amount difference written off using option "Balance", "Prepayment" or "Refund".

• Receipts which have been matched on their own without any invoices using option "Prepayment".

The following examples give us more details on how financial entries are created when booking the VAT amount, based on the new situation.

Example 1: Matching a receipt with invoices, which resulting in a positive outstanding balance

The following entries are made when user receives payment of RUR 3540 from the customer and issues an invoice of RUR 1180 within the same period:

Example 2: Matching single or multiple receipts

The following entries created when user receives payment of RUR 1180 from the customer, where user would match the receipt to reconcile it on its own amount.

Last but not least, previously the VAT entry for prepayment is booked as "Purchase credit note". Now it has been changed and booked as "Other". Thus, the VAT entry is displayed as a normal entry and not storno. Other existing functionalities like creation of Reversal VAT entry during matching and deletion of Reversal VAT entry during un-matching remain unchanged.