AugTool Documentation
Vat Reporting
Vat Locks:
The Vat Report uses Vat Locks which takes 3 dates into account i.e:
Processing start and end date (outlined in red) and Transaction end date (outlined in blue). It will show all transactions processed within the Processing Start and End date but limited to the Transaction End date.
Per the dates in the example below, you might have transactions for April 2024 and 01 July 2024 that were processed during the Processing period 15/06/2024 to 20/07/2024.The vat report will only display the April 2024 transaction but not the 01 July 2024. It will show the April 2024 transaction as it is within the Processing period but will not show the July transaction as it is after the Transaction End date.
The dates also has timestamps for precise start and cut-off times.
The Tax codes in Augtool can be selected as either Reportable or non-reportable. Only Reportable transactions are shown in the Vat Report. Transactions such as Vat Payments and Refunds through the Bank can be set-up as non-reportable so as to not show on the Vat Report. The Total Payable/Refund is calculated based on only Reportable transactions i.e all transactions in the Vat Report. However the COA balance is calculated taking into account both Reportable and non-reportable transactions.
Creating a Vat Report in Augtool is actually very simple and very powerful. But all things are simple once you have understood them.
Definitions:
Business document: A document such as an Invoice or a Journal. A screen that is used to enter data into the system for business transactions.
Tax reporting period: This does not actually exist as a period in Augtool but the period between two lock dates can be understood as a tax reporting period.
Transaction cut off date: Cut off date for all documents using the date saved (transaction date) on the document.
Processing cut off date: Cut off date for all documents using the date the document was posted (processed date). You can post an invoice today (processing) but back or forward date it for its Transaction cut off date.
The Augtool VAT Report is based on all the transactions such as purchasing and sales and any other transaction that uses a Tax Code that has been setup in your Business Unit (fiscal setup). Figures will not pull through to the VAT Report should you manually journal directly to your VAT Control Account without using a Tax Code.
To understand your VAT Report in Augative you need to understand a few key concepts driven by two elements of a lock date namely: transaction cut of dates and processing cut off dates and time.
You want to process the VAT implication of all transactions for a particular reporting period as a snapshot of that period (as if you processed it in the past) so that you can run that VAT report in the future and see what the VAT implication was at that time. This is the key to understanding Augtool's VAT report.
When processing the VAT for a VAT reporting period:
You want to be able to pick up any transactions that have been posted in the future and back dated into a previous period that would not have been pulled up in the reporting period when you ran it previously.
You want to include any transactions previously captured but future dated into the VAT reporting period you are currently looking at.
Between one lock date and another lock date the system will look for the date on the business document (not when the document was posted) AND if it was posted after the previous processing date.
Let's look at an example.
In this example we have four months to process VAT for, four invoices posted and transacted at different dates, four lock dates with their relevant processing and transaction elements creating three reporting periods.
The months we are going to discuss processing VAT for include May and July. If we have four lock dates that essentially creates three reporting periods namely 1st of May until the 31st of May and 1st June until 30 June and 1st July until 31st July.
We have setup the transaction cut of dates to be the end of each month (which will include transactions on that date) and processing cut off dates and times of the exact dates and times the VAT report was processed.
VAT processing is usually delayed a few days after the month so you will notice that the processing cut of dates are at least a week after the cut of dates.
Let's look at processing June's VAT on the 5th of July (on the third lock date above). You would select Lock date 2 and 3 to create a reporting period of 1st June until the 31st of June. Invoice 1, 2 and 3 will be pulled into this report because:
Invoice 1 because its date is within June, irrespective of it being posted on the 3rd of May, before the last processing date.
Invoice 2 because its date is within June, irrespective of it being posted on the 5th of May, after the last processing date.
Invoice 3 because its date is within June AND it was before the next processing cut of date.
Not invoice 4 because it was posted in June but its transaction date was for July.
Not invoice 5 because it was processed after the processing cut of date, even though it was affected in June. On the 5th of July when you processed your VAT, this transaction had not yet occurred. Remember, the VAT report is a snap shot of what the VAT was at that time. If invoice 5 affected this reporting period you would always have to run all the vat reports to ensure that you do not miss any back dated transactions.
Please note, the VAT Report uses the Tax Codes to generate the report. If you were to journal directly to your VAT Control Account without using the Tax Code drop down list on the journal the VAT Control Account will not tie up to your VAT Report. We have not limited this behaviour due to exceptions that would not be catered for should you need to journal directly to the VAT Control Account.