I am trying to create a vat invoice for a client whose total to be paid is 100,000.
I already created a sales invoice. Then he did a part payment of 20,000. I went to receipt and create a receipt for 20,000. I can see the amount have been deducted from the total amount.
Now i need to issue a proper vat invoice for the 20,000 that the client paid. I went to receipt and it shows the 20,000 but the problem i need it to be a vat invoice showing the 15%. On description it shows account receivable. How can i made that receipt a proper vat invoice.
Thanks for your reply Joe. I though about that but then when you do a report this amount will be accounted as a double entry. Reminding that i already create an invoice for 100,000 which have been paid partially by 20k.
I need invoice the client each and every time he made a payment as he need to claim the vat back. The work is on progress(construction work)
The invoice need display, sub total, vat and total.
@rodwish, you need to consult a local accountant. VAT may be claimable when accrued or when paid, depending on local law. Whatever your local requirement, Manager can handle it. But if you have invoiced the full amount, it has already been assessed in full. Your receipts against the sales invoice, which will be posted to Accounts receivable, should include no tax code at all.
It will either be up to your customer when to claim VAT paid based on your full assessment or you will have to issue multiple sales invoices. Regardless of what you think you want to do, you will have to adjust your process to match local law.
VAT is recognized on invoice when issued notwithstanding when and how many times it is paid. When payment is made then it has to be allocated to which part of the invoice: is it the VAT or the transaction part? Why is this distinction necessary? It is only when the VAT is paid that you can remit it to the government and the government will take note and issue a receipt. Until you remit, he can not get a tax credit/receipt. If he wants to claim the VAT on every payment, especially as it relates to construction which necessitate that only part of the certified work is paid for, then invoice should not be issued at the negotiation/initial billing stage but at every certificate stage and at that state VAT should be recognized for that part of the work that is completed. That is instead of issuing an invoice of N100,000 for the whole job; issue invoice for the 1/5 (or that part) that has been certified and recognize VAT.