Reconcile Revenue P&L with Revenue Tax report

#1

I’m trying to reconcile the total amount of revenue in 2018 in my P&L with the total amount of revenue reported via declared tax using the Dutch report Concept BTW Aangifte. I’m with no luck. I’ve used the Billable Expenses module, so part of my reported tax revenue went via the balance sheet and isn’t reported in my P&L. I’ve registered some revenue using Receipts and most via Sales Invoices.

I can reconcile my P&L via the Profit and Loss Statement report with the Tax Audit report after summarizing the totals per account in Tax Audit. I can reconcile the Concept BTW Aangifte report with the Tax Summary report. But I can’t reconcile the Tax Audit report with the Tax Summary report.

I can’t reconcile the total of revenue in the Tax Transactions with no other report. I’ve created a custom report to report all transactions using one of the tax codes (BTW 21%) and filter in Excel the debit amounts. No luck.

So, I need to know the report definition of the Tax Summary report to understand the relationship with the P&L to make correction journals to create my fiscal P&L that reconciles with my declared Tax revenues. Can anybody help me out? After 6 hours of puzzling I gave up.

#2

Without seeing your actual records, or understanding exactly what reconciliation means to you, let me offer a few suggestions:

  • Be sure all reports are set to the same accounting basis, either cash or accrual.
  • Make sure the date ranges match.
  • Understand that line items without tax codes will not appear on some reports.
  • Be sure you fully understand the impact of billable expenses. I recommend creating a test company and processing some transactions all the way through from expenditure to invoicing to receipt to observe the effects on all accounts, particularly Tax payable.
  • Be very cautious about “correction journals.” Normally, none should be needed for taxation purposes. The fact that you are considering them suggests you might only be covering up other errors or even introducing new ones. This could be complicated by any such journals entered in prior years. Remember, while financial accounting can be different from tax accounting, that does not mean your financial accounting should necessarily be adjusted to match what you report on tax filings.

Beyond that, you will need to be much more specific to get answers.

#3

Hi Tut,

Thank you for your suggestions!

  • All reports are accrual
  • Date ranges matches
  • line items without tax code are not in the revenue, nor in the Dutch tax report
  • correction journals that you reverse at the start of the following accounting year help you to create a temporarily fiscal balance and P&L

I’m currently testing all financial flows in the test company as you suggested. So far nothing unexpected has happened (regular sales, billable expenses, billable time). The revenue on the tax report equals the revenue on the P&L + the Billable expenses. I’m afraid a few exceptions mess everything up, but I first have to find them.

#4

Hi Tut,

I found the differences between the Tax Summary Reports and the Tax Audit reports. My findings:

  • Refund on revenue done via the bank (Transaction type Payment) are shown in the Tax audit report, but not in the Tax Summary report. I think it’s a bug, because revenue posted via the bank (Transaction type Receipt) are reported in both. Fortunately it only happend 2 times, so I’m going to fix it via a credit note.
  • Billable Expenses is the big problem for me. I can’t find a simple report where the PI and SI on that balance account with tax codes are shown. I like the functionality that I can see on the debtor which amounts are to be invoiced. But for tax reasons (but also for economic reasons) those sales should go via the P&L (and the purchases via Cost of Sales on the P&L). It would be great to be able to tell the Billable Expenses module that it should run via the P&L instead of the Balance sheet. Until that time, I think I’ll stop using it or do a quarterly reconciliation via the Tax Summary and Tax Audit report.
  • The last one I found was a commission I had to pay for a sale, so I posted the revenue on the revenue account and the commission negative on the cost of sales account on the same sales invoice. That amount was shown in the Tax Summary report, but should not. Any thoughts on this?
#5

it would be helpful to post the edit screens of the transactions in question, before any correction took place

#6

Refund on revenue via bank

#7

Commission

#8

The Billable Expenses tab is unique in the program, because you cannot make direct entries. All entries must be made via other tabs, such as Receipts & Payments. And the transactions that go through as billable expenses ultimately do not end up on your balance sheet or in your profit and loss statement. They are expenses of your customer. The way to handle taxes on billable expenses depends on local law.

If you apply a tax code on a payment posted to Billable expenses, the tax is debited to your Tax payable account. Thus, you are claiming input tax for the expense, even though the expense is not yours. No tax is passed on to your customer. That may not be what you want to accomplish. You might instead purchase the item for your own account and resell it to your customer, applying the tax code on the sale. That way, you will end up collecting the tax from your customer.

Then it would not be a billable expense, but an ordinary purchase and sale, as described above. Billable Expenses is not a tab that should be used by everyone. In my opinion, it is most useful for non-offsetting tax situations, such as sales taxes, rather than VAT.

Your commission question does not make sense to me. The way you have done it, you are apparently paying commission to the customer who is buying the goods or services. Why is that? All you have done is effectively given the customer a discount.

#9

Yeah, that seems to be the solution. But I like the feature that enables me to select open Billable Expenses on the debtor and create a single Sales Invoice. I just saw that I can copy a Purchase Invoice to a Sales Invoice, but I can buy several goods from several suppliers, so I can’t copy them into a single Sales Invoice… That’s extra work to input the bought items for a project into a sales invoice. And I’ve tried the Sales invoice import function. The first tests were not a great success. I have to test it a bit more.

With the addition of putting multiple purchases on a single invoice, managed per debtor.

The customer is a reseller. He organized a festival, people paid for my services with tokens bought at the festival. I charged the customer for the amount of sold tokens. He wants a commission. It’s different to a discount (in the end the effect is the same, but it’s a different kind of costs). But why is shown on the Tax Summery report and not on the Tax Audit report? Any idea’s?

Do you agree?

#10

Yes, you can. Uninvoiced items in the Customers tab (including billable time and billable expenses) are at the line item level, not the purchase invoice level. So, you could have 10 purchase invoices from 10 different suppliers, each with 10 line items, for a total of 100 line items posted to Billable expenses. You can select any or all of these when creating a new sales invoice from the Customers tab.

As for what is shown on which report, I am not following your story. You would need to illustrate this completely, showing screen shots of transactions and reports. It’s very difficult, sometimes, to troublehshoot without access to the actual file. (And before you think about offering to send it, that is a place I won’t go.)