In some topics this was part of the discussion. With this new topic I want to make the situation clear to everybody especially to Lubos
On the website Lubos wrote: “Everything is designed. Few things are designed well.”
In my opinion there is an inconsistency in the VAT reporting due to a let’s say a mistake in the design
This hasn’t anything to do with transparency to the tax-authorities, it is a thing of how figures are presented and whether the presentation is correct or incorrect.
Let’s make it clear with a case:
Customer A wants me to buy product A for him. My purchase price € 60.00 excl. 21% VAT. The product will be sold to him for € 100 excl. 21% VAT. After a couple of days my customer returns the product
and on my turn I return the product to my supplier.
There are a couple of ways how in real life the transactions can happen:
- All transactions are done by cash (Receipt and Payment)
2 a My supplier sends me a purchase invoice, I send a sales-invoice to my customer, I send a credit note to my customer and I create a debit note for my supplier
2 b My supplier sends me an invoice, I send a sales-invoice to my customer, I send a negative sales-invoice to my customer and my supplier send me a purchase invoice with negative values.
Method 1 results in a Tax-Summary report with Net Sales value of € 160.00 with Tax on Sales of € 33.60and Net purchases of € 160.00 and Tax on Purchases of € 33.60.
Methods 2a and 2b result in a Tax-Summary report with zero-values.
Business-wise there is no difference between method 1 and methods 2 in what happened in the business: no business at all.
In Manager however it is recorded in a different way. The Tax-Transactions Report show it very clearly
In my opinion method 2 its the correct representation and method 1 not.
All Dutch accounting software I know have two separate VAT-accounts: one for VAT Tax Payable and one for VAT Tax Deductable both with their own VAT-codes. e.g. BTW 21% Payable and BTW 21% Deductible.
You can link these codes to the general-ledger accounts. The payable codes to the sales accounts and the deductible codes to all expense-accounts, regardless whether it is a debit or credit transaction on that account.
All transactions are treated the same way so there is no difference between a sales invoice, cash transaction journal entry or whatsoever.
The design mistake in Manager is with cash and bank and journal entries. All credit transactions are recorded as a sale transaction and all debit transaction are recorded as a purchase transaction. That is the inconsistency in Manager.
I entered transactions Method 1 in Q1 and Method 2 in Q2 and below you find the corresponding reports that show the inconsistency.
Hopefully Lubos will find a solution to eliminate this inconsistency.
Reports Method 1:
Reports Method 2