It is now possible to automate the posting of a journal to net the balance of accrued VAT into a separate control nominal code without affecting the values reported in Nominal Ledgers VAT Analysis reports.
This new feature negates the need for a user to perform such a journal manually each month.
When enabled, a journal will be created as part of the nominal ledger update routine. These journals shall not affect the VAT analysis reports.
An additional page has been added to the Nominal Ledger > Tax Maintenance > VAT tab called Report Parameters.
Three new parameters have been added to this screen:
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Automatic VAT Cleardown Nominal Code - Nominal outstanding balances will be moved to.
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VAT Clear Down Posting Reference - Reference applied to the transaction (and associated postings) created as part of the update process.
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VAT Clear Down Narrative - Narrative added to postings in the journal transaction.
These parameters can only be selected if a Dimension Item is set in the 'Exclude from VAT Report' field. We recommend setting the Automatic VAT Clear Down Nominal as the VAT control nominal code which users would normally post their quarterly VAT payments.
In addition, the other VAT related parameters that were previously held in the 'Miscellaneous' menu have also been moved into this section these parameters are:
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Exclude from VAT Reporting
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Validate Tax Types for Journals
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Force VAT Narrative on transactions
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Prevent Tax Types For Sundry Payment.
When the Nominal Ledger Update process has been run, any balance outstanding on a VAT nominal code (set in Tax Categories) for the period for which the Nominal Update has been run shall be journaled to the Automatic VAT Cleardown Nominal code.
If the update process has been run in the latter of 2 open periods, then a journal will be created for both periods.
A message will be displayed at the end of the Update process displaying the periods the VAT Clear Down journal has been run.
If the Automatic Clear Down Nominal Code and the Posting Reference parameters are set and there is an outstanding balance on one or more of the VAT codes set in Tax Categories, then a warning will be displayed in the Nominal Ledger Month end process, advising that 'Accrued VAT balances are not zero'.
The user will be required to run the Nominal Update before the Nominal Ledger month-end process can be completed.
If the parameters related to creating this journal automatically are not set, then the warning is not displayed and the Month End process does not change.
The VAT clear down journal will be created in the period in which the update was run and the date will be the period end date. The reference and posting narrative shall be what is entered in the VAT Clear Down Reference and Narrative.
Dimension items, narratives and posting references will be applied to all postings in the transaction.