About VAT amount validation in documents

Some discrepancies can appear between the VAT amount computed by the system on the document entry window and the VAT amount specified in the original supplier document.

These discrepancies may be caused due to rounding differences, for example, when the VAT amount of the original document was calculated in another system in which the rounding rules are set up differently.

The discrepancies can be minor differences in decimals, but nevertheless they should be corrected.

If any discrepancy arises and the system shows the corresponding error, you manually correct the VAT amount in the VAT amount column of the VAT details tab so that it matches the VAT amount of the supplier document.

In that case, if the Net VAT calculation method has been applied, all the amounts in the document will be exactly the same as in the source document (after you correct the VAT amount manually) and the document will be balanced.

If the Gross VAT calculation method has been applied, the taxable amounts used by the system for VAT amount calculation can differ slightly from the taxable amounts used for the original document. In that case, the discrepancy (the amount of the difference) that has occurred will be accounted and posted to the corresponding general ledger account.

Thus, as a result, the document will contain exactly the same amounts as the source document, but the amount that has appeared due to rounding differences, will be accounted on the respective general ledger account:

In that case, the general ledger transaction will look as shown in the following example:

Account	Debit	Credit
Supplier ledger account		Total amount
Expense account (Line 1)	Amount1
Expense account (Line 2)	Amount2
Tax payable account	VAT amount
Rounding gain/Loss account	Discrepancy amount (the difference due to the rounding amount)

To account for the discrepancy amount, you need to specify the maximum amount of the difference that can appear due to rounding in the Rounding limit field in the General ledger preferences (GL102000)window.
The system will validate this amount against the discrepancy amount, and if the discrepancy amount does not exceed the limit, the discrepancy amount will be posted to the general ledger accounts specified in the Rounding gain account/subaccount field or the Rounding loss account/subaccount field in the General ledger preferences (GL102000)window.

Before entering amounts in the detail lines of a document that you enter into the system, you must consider the type of amounts specified in the original supplier document. Depending on the business requirements of the applicable supplier, a document can contain in its detail lines amounts that are either VAT inclusive (net) or VAT exclusive (gross).
In Visma.net ERP, you need to specify the VAT calculation mode that the system should use during the validation process.
The selected mode defines how the system will compute the VAT and taxable amounts for the document.

You select the required mode in the VAT calculation mode field (which can be found on several windows, as described below), in which the following options are available:

• Gross:
  
  Select this option if the amounts in the document detail lines include applicable taxes.
• Net:
  
  Select this option if the amounts in the document detail lines do not include taxes.
• Tax settings:
  Select this option if the standard tax settings should be applied to the document.
  This option is used if a tax with one of the following tax calculation methods selected in the Calculate on field in the VAT (TX205000) window is applied to the document: Calc. on item + VAT amount, Calc. on document amount, and Calc. on document + VAT amount.
  

Document:
You select the appropriate option on the Financial details tab of the document entry window.
This option will be applied for computing tax and taxable amounts in this document.
By default, the system fills in this field with the option specified for the supplier location (if applicable) or supplier that you specify for the document, but you can override the default option.

Supplier location (if applicable):
You select the appropriate option on the General settings tab of the Supplier locations (AP303010) window.
(By default, the system fills in this field with the option specified for the supplier, but you can override this option.)
This setting will be applied by default to all documents in which you select this supplier location, but it can be changed for each document.

Supplier:
You select the appropriate option on the Purchase settings tab of the Suppliers (AP303000) window.
(By default, the system fills in this field with the option specified for the supplier class, but you can override this option.)
This setting will be applied by default to all documents created for this supplier (if the option is not changed at the supplier location or document level).

Supplier class:
You select the appropriate option on the General settings tab of the Supplier classes (AP201000) window.
This setting will be applied by default to all documents created for the suppliers of this supplier class (if the option is not changed at the supplier, supplier location, or document level).

To speed the process of entering data on a document entry window, the system suggests a possible amount in each line that you add.
For example: When you add the first line, the system automatically inserts in the Ext. cost column of the line the amount that you have entered in the amount validation field in the top part of the document entry window.

The suggested amount is exactly the same as the control amount you have entered (if the Gross VAT calculation mode is specified for a document), or this amount is recalculated according to the rate of the applied tax or taxes or the amount minus the applicable VAT amounts (if the Net VAT calculation mode is specified).
You leave the ext. cost amount as it is if the document has only one line.

If the document has multiple lines, you manually correct the first ext. cost amount in the document entry window based on the amount specified in the first line of your source document.
When you add the second detail line, the system suggests the residual amount (the difference between the total document amount and the amount that you have specified in the first line) in the Ext. cost column of the second line; correct this amount if needed.
The process proceeds similarly for any additional lines that you need to add.
You can leave the suggested amount or correct it.

After you have added all required detail lines to the document entry window, the system compares the VAT amount (or amounts) computed on the VAT details tab to the control value you have entered in the VAT amount validation field of the window.
The document is balanced if the VAT amounts are the same; the system generates an error if there is any discrepancy.