Linking Journals for correct NET VAT Calculations

Note: TPH Payroll journals correctly assign a separate transaction number so the NETs are picked up correctly. You will not have to follow this guide and can simply paste them in following way in the linked article: Pasting in TPH Payroll Journals.

If you are posting in Journal batches with the same transaction number the NET calculations on your VAT Report (VAT Report / Reconciliation) may not be getting picked up correctly.

This will usually occur with non-TPH Payroll Journals. If you are not using TPH for your Payroll the journals you receive to paste into Eclipse will be using the same transaction number for the entire batch.

In order to correctly link your journals for tax calculations you will need to follow the below steps:

1. All journal entries in the batch must have the same transaction number

• For example, we have the following journal posted below with 4 lines tax lines.

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• If we run a VAT Report we can see that the Report is summing both the NET Lines to 300 because they are using the same transaction number and tax flag. This is overstating the NETS on the report.

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2. You will need to enter in a unique invoice number in the journal batch to link the different entries to their NET and VAT amounts

• If you have not linked the entries before posting, you can edit the invoice number in ledger inquiry either manually by editing the Invoice field or via a paste in from excel. See Ledger Inquiry and Bulk Transaction Updates

• For the example, we have updated the journals with Invoice number 1 and Invoice number 2 in ledger Inquiry to group the NET and VAT amount together.
  
  

• Once this is done and you run the VAT report again, your NET calcs should now be correct.

• For the example, the VAT report is now correctly calculating the NET for each VAT line.
  
  

  
  
  

3. Ensure that the EmpRef is left blank

• This field must be blank for the calculation to work correctly.

• If you need to clear the EmpRef column after posting, you can follow this guide Ledger Inquiry and Bulk Transaction Updates
  
  

  
  
  

Check if your data is correct before posting by running an Unposted VAT Report

1. If you are unsure your journals have been entered into a batch correctly, before you post them into the Ledger you can run the VAT Report over the unposted Journals. To do this, select your VAT Report from Ledger Inquiry but de-select your Source Codes and Select only Unposted Journals in your selection tab.

   • Untick all the source codes for posted data

   • Tick Journals in Unposted Batches

   • Make sure Calculate Net Tax Amount is ticked