I added a purchase in Journal entry for few items, and for one of them it was considered as selling item not purchase. that also affect the VAT.
I deleted and made the entry several times but still facing the same issue.
how to solve this matter?
Welcome onboard @mam970
First I need to point out that it’s not recommended to use Journal Entries to record your purchase since Purchase Invoices, Payments and Expense Claims are available feature to use for purchasing and expenses.
That aside, please provide the following information:
- Edition and version of Manager
- Locale of this report
- A screenshot of the edit screen of the Journal Entry in question.
It is most unusual to include VAT when recording an accrual
You should just record the accrual amount and not include the tax code
Also, you would normally credit an accruals account, not the Custody Fee Payable account
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I need to see the full journal entry especially the field after Add line
I think I found a solution for this matter by adding all those accumulated expenses in a form of purchase invoices, and it works.
many thanks for your support.
You are welcome, but just for your reference.
There’s your culprit in your Journal Entry:
You need to set it to “Purchase or purchase adjustment”
It is incorrect accounting to record purchase invoices that do not yet exist
An accrual is recognition of a purchase or charge for which no invoice has yet been received
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totally agree with you, but how to add automated accumulated expenses in the system?
What do you mean by “automated accumulated expenses” ?
Please explain using concrete examples
I signed a contract with service provider, the total value of the contract is 150,000 per year (there is a VAT for it), but will be paid on quarterly basis. I wand to calculate it on monthly basis to manage my cash flow.
Sorry, are we talking about the service being provided to your business or by your business?
VAT is usually based on actual invoicing although in some countries you can use a cash basis for VAT collections and returns
I would be surprised if you could claim VAT on a national monthly invoice when you are invoiced quarterly
maybe I was not clear enough.
I am talking about a service provided to my company, (will be input VAT). We calculate the accrual service fee + VAT to figure out the needed cash at payment day, this is why we calculate the VAT up front.
@mam970, your situation is more complicated than you seem to think. You probably need to consult an accountant about this. The terms of the contract will govern how this is handled in your accounts. That is, they will determine when a taxable service has been provided and in what amount. Determinative factors will include whether you are obligated to pay the full amount from the beginning (in quarterly installments), only one quarter’s worth at a time, or as services are provided over the course of the agreement. Your payments might be fees for service, or they could be advances (retainers). The regulations governing VAT in KSA will determine when the VAT is payable.
Figure this out with your accountant. Then return to the forum with specific questions if you do not understand how to implement your accountant’s instructions.
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I agree with @Tut to be very careful. Input and Output VAT are not part of your P&L even though you transact them according to government requirements. It is an end-consumer tax. The issue is that the company you purchase items from will properly record the VAT as a liability and pay it according to the Government determined schedules, usually monthly as they like fiscal revenue 
So if you record and thus claim it several months later this may cause real fiscal and legal issues. So the sooner you consult a tax accountant the better and then as @Tut suggested return to the forum if you have further questions how to implement it in Manager.
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Many thanks for your advice. But, I think it’s not that complicated, as per the agreement; the service provider will issue a quarterly invoice to the company with details of all amount owing under the agreement which shall be payable within 10 working days following the receipt day.
The amount will be fixed ((150k Ă· 4) + VAT).
Kind regards,
You should have revealed this from the start. Your situation is very straightforward. You should enter four purchase invoices as you receive the supplier’s sales invoices.
There are no accruals involved.
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Can I make an accrual for it as it’s assure that the money must be paid at the end of the quarter, at least to be seen in the monthly cash obligation report?
Not based on what you have now revealed. And there is no such thing in Manager as a cash obligation report. Manager is not a forecasting tool.
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