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Using TurboCASH

 







TAX
PAYMENTS BASED VAT TRANSACTIONS
  
When entered in batches and journals for which a VAT account (Tax code) is selected, and the transactions are balanced and posted to the ledger in batches or Journals, the VAT transactions are posted to the general ledger Tax accounts. If you are generating documents, the VAT transactions are also updated to the ledger. The Output VAT transactions and Input VAT transactions are posted as follows:
  1. Output Tax VAT - Accounts are credited when transactions (on which VAT is applicable) is entered in the sales journal or sales returns journal for debtors or creditors and receipts journal. If you process documents for your debtors or customers (invoices, credit notes, quotes and point-of-sale invoices), TurboCASH will calculate the correct Output Tax (VAT) inclusive or exclusive according to the percentages for which the VAT applies.

  2. Input Tax VAT - Accounts are debited is when transactions (on which VAT is applicable) is entered in the purchase journal or purchase returns journal for creditor suppliers and the payments journal and petty cash payments journal. If you process documents for your creditors or suppliers, (purchases, stock or goods returned documents, or orders), TurboCASH will calculate the correct Input Tax (VAT) inclusive or exclusive according to the percentages for which the VAT applies.

In the case of the Invoiced Based - VAT Accounting basis, the VAT is payable on the full amount of the Output VAT transactions less the Input VAT transactions generated during the Tax Period at the end of the Tax period. In the case of the Payments Based - VAT Accounting basis, the Output VAT is only payable when it is received (and not when the Invoice is issued) and Input VAT may only be claimed when it is paid (and not when the supplier invoice is received). TurboCASH will calculate or apportion the VAT amount for the actual VAT amount, which is actually received or paid when the receipts (deposits) are entered and balanced in the receipts journal or when the actual payment is entered, balanced and posted in the payments journal.

 

At the end of the Tax period, the Output VAT is payable only for the actual amounts received or paid and invoice VAT is claimed only for the Input VAT for the actual amounts paid.

To Process Receipts in the Receipts Journal:

When you have entered the amount in the receipts journal, for a debtor account, the Open Item Selection screen will be displayed, listing all the Invoices and / or transactions with outstanding amounts for the selected Debtor account. You need to select the Invoice or the transaction for which the payment is received and press the <Enter> key to link the receipt and to close this Open Item Selection screen.

Minimise button - click to minimise this screen. Restore button - click to display this screen to full size and click again to restore it to its original size. Title bar. Title bar. The name of the selected batch. Title bar. The Alias for the selected batch. Close button - Click to close or exit this screen. Click to delete a selected transaction. Click to insert a row or line above a selected transaction. Click to balance the batch, if the batch is not already in balance. Click to post or update the transactions to the ledger, if the batch is in balance. Click to enter transactions Inclusive or Exclusive of VAT. Click to list the entries or transactions entered into the batch. Click to access more processing options for the batch. Click to set the Options for this batch. Enter the deposit number for the transaction in this column. If more than one receipt is on the same deposit slip, use the same reference number. Enter or select the date of the transaction in this column. Enter a description for the transaction. Select the General Ledger or Debtor Account. Leave blank. TurboCASH will calculate the VAT when you link this receipt transaction to a specific debit transaction or Invoice. No amounts should be entered for deposits in this column. Enter the credit amounts for Receipts. Scroll bar - scroll to view more transactions entered in the batch. Open Item Selection Title bar. Close button - Click to close or exit the Open Item Selection screen. An arrow pointer will indicate the selected transaction. The date of the debit transaction entered in the Sales Journal or the date of an Invoice or POS Invoice. The Reference number transaction entered in the Sales Journal or the document number of an Invoice or POS Invoice. The deposit or receipt reference number in the Receipts batch. The amount of the transaction. The outstanding amount will be a less than the transaction amount, if a previous payment is linked to a transaction. The amount of the deposit or receipt in the Receipts batch. Vertical scroll bar - move up or down to view more transactions, if necessary.

Once you are finished to enter the receipt transactions, you may balance the receipts journal. TurboCASH will calculate and or apportion the VAT for the actual amount received and generate balancing entries to the Bank account and to debit the Output VAT amount (the calculated and / or apportioned amount) and credit the VAT Payments (Due Account).

Minimise button - click to minimise this screen. Restore button - click to display this screen to full size and click again to restore it to its original size. Title bar. Title bar. The name of the selected batch. Title bar. The Alias for the selected batch. Close button - Click to close or exit this screen. Click to delete a selected transaction. Click to insert a row or line above a selected transaction. Click to balance the batch, if the batch is not already in balance. Click to post or update the transactions to the ledger, if the batch is in balance. Click to enter transactions Inclusive or Exclusive of VAT. Click to list the entries or transactions entered into the batch. Click to access more processing options for the batch. Click to set the Options for this batch. Enter the deposit number for the transaction in this column. If more than one receipt is on the same deposit slip, use the same reference number. Enter or select the date of the transaction in this column. Enter a description for the transaction. Select the General Ledger or Debtor Account. Leave blank. TurboCASH will calculate the VAT when you link this receipt transaction to a specific debit transaction or Invoice. No amounts should be entered for deposits in this column. Enter the credit amounts for Receipts. Scroll bar - scroll to view more transactions entered in the batch. TurboCASH generates balancing to the bank account. TurboCASH generates balancing to transfer the Output VAT amount or portion thereof to the Due account (VAT Payments account).

The amounts for Debtor accounts are linked on the Open Item Selection screen, since all Debtor Accounts are Open Item accounts on the Payments Based VAT basis. These transactions will be displayed in a yellow background.

The description for the balancing entry is given as "BALANCING ENTRY Receipts Jnl". It is a good idea to overtype this description as it is not very meaningful to an outside auditor or accountant. If you overtype these it will definitely make it easier to trace and reconcile transactions.
  • Overtype the description with "Deposit Slip D5003" in the description column.

  • Overtype the descriptions with "Output VAT - Deposit Slip D5003" in the description column.

  • Do not overtype the ******** as it will indicate that these are contra transactions.

To Process Payments in the Payments Journal:

When you have entered the amount in the payments journal, for a creditor account, the Open Item Selection screen will be displayed, listing all the purchases and / or transactions with outstanding amounts for the selected Creditor account. You need to select the purchase or the transaction for which the payment is made and press the <Enter> key to link the payment and to close this Open Item Selection screen.

Title bar. The name of the selected batch. Title bar. The Alias for the selected batch. Title bar. Close button - Click to close or exit this screen. Click to delete a selected transaction. Click to insert a row or line above a selected transaction. Click to balance the batch, if the batch is not already in balance. Click to post or update the transactions to the ledger, if the batch is in balance. Click to enter transactions Inclusive or Exclusive of VAT. Click to list the entries or transactions entered into the batch. Click to access more processing options for the batch. Click to set the Options for this batch. Enter the document or reference number for the transaction in this column. Enter or select the date of the transaction in this column. Enter a description for the transaction. Select the General Ledger or Creditor Account. Leave blank. TurboCASH will calculate the VAT when you link this receipt transaction to a specific credit transaction or Purchase. Enter the debit amounts for Creditor Accounts. No amounts should be entered for payments in this column. Scroll bar - scroll to view more transactions entered in the batch. Open Item Selection Title bar. Close button - Click to close or exit the Open Item Selection screen. An arrow pointer will indicate the selected transaction. The date of the credit transaction entered in the Purchase Journal or the date of the Purchase document. The Reference number transaction entered in the Purchase Journal or the document number of the Purchase document. The cheque or payment reference number in the Payments batch. The amount of the transaction. The outstanding amount will be a less than the transaction amount, if a previous payment is linked to a transaction. The amount of the payment in the Payments batch. Vertical scroll bar - move up or down to view more transactions, if necessary. Minimise button - click to minimise this screen. Restore button - click to display this screen to full size and click again to restore it to its original size.

Once you are finished to enter the payments transactions, you may balance the payments journal. TurboCASH will calculate and or apportion the VAT for the actual amount paid and generate balancing entries to the Bank account and to credit the Input VAT amount (the calculated and / or apportioned amount) and debit the VAT Payments (Due Account).

Title bar. The name of the selected batch. Title bar. The Alias for the selected batch. Title bar. Close button - Click to close or exit this screen. Click to delete a selected transaction. Click to insert a row or line above a selected transaction. Click to balance the batch, if the batch is not already in balance. Click to post or update the transactions to the ledger, if the batch is in balance. Click to enter transactions Inclusive or Exclusive of VAT. Click to list the entries or transactions entered into the batch. Click to access more processing options for the batch. Click to set the Options for this batch. Enter the document or reference number for the transaction in this column. Enter or select the date of the transaction in this column. Enter a description for the transaction. Select the General Ledger or Creditor Account. Leave blank. TurboCASH will calculate the VAT when you link this receipt transaction to a specific credit transaction or Purchase. Enter the debit amounts for Creditor Accounts. No amounts should be entered for payments in this column. Scroll bar - scroll to view more transactions entered in the batch. TurboCASH generates balancing to the bank account. TurboCASH generates balancing to transfer the Input VAT amount or portion thereof to the Due account (VAT Payments account). Minimise button - click to minimise this screen. Restore button - click to display this screen to full size and click again to restore it to its original size.

The amounts for Creditor accounts are linked on the Open Item Selection screen, since all Creditor Accounts are Open Item accounts on the Payments Based VAT basis. These transactions will be displayed in a yellow background.

The description for the balancing entry is given as "BALANCING ENTRY Payments Jnl". It is a good idea to overtype this description as it is not very meaningful to an outside auditor or accountant. If you overtype these it will definitely make it easier to trace and reconcile transactions.
  • Overtype the description with "Payments Cheque 113 " in the description column.

  • Overtype the descriptions with "Input VAT - Payments Cheque 113 " in the description column.

  • Do not overtype the ******** as it will indicate that these are contra transactions.

After posting the transactions for payments received and payments made on the Payments Based - VAT Accounting basis, is posted to the ledger, the VAT transactions is as follows:
  1. Full VAT amount at the time when the Sales and Purchase transactions was generated:

    Sales Invoice was entered in the Sales Journal and posted to the ledger and /or Input - Documents - Invoice - Enter menu option was updated to the ledger or if a Point-of-Sales Invoice (charged to Account (Debtors)) and the Point-of-Sales Shift is closed created credit transactions to the Output VAT account.



    Purchase (Supplier Invoice) was entered in the Purchase Journal and was posted to the ledger and / or in the Input - Documents - Purchases menu option was updated to the ledger created a debit transaction to the Input VAT account.



  2. VAT amount at the time when the Receipts and Payment transactions was generated:

    The full amount is payable or may be claimed at the end of the Tax period if you are registered for VAT on the Invoice Based - VAT Accounting basis. But if you are registered for VAT on the Payments - Based Accounting basis, the VAT is only payable when you have physically received the actual payments from your debtors and only when you pay any amounts to your creditors.

    When processing these receipts and payments, TurboCASH will calculate or apportion the VAT and generate and post the balancing entries to adjust the Output VAT and the Input VAT accounts and transfer the amounts to the VAT Payments (Due Account).



    At the end of the Tax period, you will only need to pay the Output Tax and claim the Input Tax for the VAT on the actual payments received or made.

    In the above example, Output VAT of R() 350 (R() 210 + R() 140) was generated at the time of the sale and Input Tax of R() 140 was created when the purchases were made. Since only the VAT on the Payments received was only R() 70, only R() 70 is [payable to the Tax Authorities during this Tax period and the balance is payable in the next tax period(s) when the actual moneys is received. On the credit purchases Input VAT for R() 140 was generated, but the VAT on the actual payments made was only R() 35, only R() 35 Input VAT may be claimed during this Tax period.

    In this example, only R() 35 (R() 70 Output VAT less R() 35 Input VAT) is payable at the end of the Tax period. When this amount is paid to the Tax Authorities and the transaction in the payments journal is posted to the ledger, the VAT Payments or Due Account should have a zero balance for the Tax period.

At the end of the Tax Period (or any other time you wish), you need to generate the following reports to check your VAT and to fill in your VAT return:

You may enter transactions in a batch daily and only post at the end of the month. Exiting or closing the batch, or even TurboCASH, will not cause these transactions to be lost. You may also choose to post after every entry.

TurboCASH allows you to reconcile your Bank Accounts before posting your Payments and Receipts journals. This will allow you to easily correct any errors found, when doing the bank reconciliation. Please note that you cannot reconcile unposted items created on the "client machines" if you are working on a network version of TurboCASH.