Congratulations on getting associated with Reach Accountant, The Next Gen Cloud Accounting Software. This is your first step in becoming a Future-ready Accountant and be enabled with tools needed for you
What is Cloud Accounting?
Think about Facebook, Gmail and Internet banking. Every time you login and access this data, you’re using the cloud. The Cloud becomes possible because of availability of internet. It makes data and software accessible online anytime, anywhere, from any device.
Traditionally, your software was stored in your Hard disk and hence allowed only you to access at any time. A few years later, You were able to share your hard disk with multiple computers within your office using a LAN. With the advent of the internet, you can now allow multiple users to access the same software from anywhere in the world. This is called Cloud Computing
What is Reach Accountant?
Reach Accountant is an Accounting Software. However, Unlike your traditional software like Tally, MYOB etc, it is hosted on the Cloud and so allows you to access and use from anywhere like your facebook or gmail using a browser.
Reach Accountant is made to suit 21 different businesses and hence gives a business the advantage of using a single software without having to customise the software for their needs.
Setting up your Account
Setting up your Account involves creating your software account and getting it ready to use.
Here are some key things you should do:
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First, you will have to Set up your Company, Branches and Users (next)
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Once the company is created, You can download the Desktop icon and mobile app to facilitate easy access from next time (Then)
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Reach gives you an option to customize the names of the menu tabs, You can change names, design the Invoice templates to your preference and setup the sms and email templates
Training your Users
Once your Account is set-up, The next step is to train the users.
Depending on the size of the company, you can identify the employees who will be responsible for using the software.
The following employees can benefit by using Reach Software
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The Billing Counter Clerks
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The Accountant
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The Purchase Incharge
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The Warehouse/ Godown managers
Though all of the employees can use Reach at the same time, for the purpose of training, you will have to identify one super user within your organization. This super user can be yourself or any of your senior employees who understands the business.
The super user can ideally take up a one-on-one training with one of our consultants and can watch all our training videos to get trained in the product. These training videos are available in our website www.reachaccountant.com
Import your Old Data
Once your users are trained in the software and have practiced the entries in the software, You are ready to roll out for daily transactions.
Here is how you do it:
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Import your Customers, Vendors, Products and Account Ledgers into the software
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If you are making this transition halfway through and are already using a software, you can also import your transactions like, Sales and Purchase orders, Invoices, receipts and payments
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Once done, check if the Trial Balances, Customer and Vendor Balance and Opening Stock tallies in the respective reports.
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After this, you can start using Reach Accountant everyday
Setting up the VAT details involves the following:
- Setting up Business Profile.
- Adding VAT details of the Customer.
- Adding the VAT Details of the Vendor.
- Mapping the Account ledger to VAT Return items.
To start with let us see how to set-up the Business profile with VAT
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Go to My reach under settings tab
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Click Organisation name now Financial date appears
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Choose current Organisation name
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Go to click Update under action button and scroll down
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Now go to add Tax details Add TRN, Self billed permit no and company Register number and click save
Once this is done, The basic VAT set-up is done. Now let us see how to set up your customers and vendors.
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Go to settings under settings
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Click Customer under income tab
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Click add customer
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Add customer name and click more details, click vat button and add TRN and select Reverse applicable Subject to reverse charge or not Subject to reverse charge
Similarly, you can set-up your vendors too:
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Go to settings under settings
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Click Vendor settings under Expenses tab
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Click add vendor
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Add vendor(supplier) name and click more details, click vat button and add TRN and select Reverse applicable Subject to reverse charge or not Subject to reverse charge and Click Create
Once you set-up your Customers and Vendors, You will also have to carefully map the designated ledgers to appropriate fields in the VAT Return.
Please note that Your Reach Software Account will have pre-designated default ledgers which are already mapped appropriately;
However, if you are creating new account ledgers, please make sure that you map the ledgers correctly.
Now let me show you how ledgers can be mapped to VAT Returns
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Go to settings under settings
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Click Account ledger under Accounting
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Click Add a account
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Now go to add ledger group ledger name and opening balance, Then Enable the Taxable ledger checkbox and map to Vat return form,
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Select Form 1 and select supplies type
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On doing so, the software will ask you to map the ledger to an appropriate field in the VAT Return.
Now before I explain what this means, let me help you understand how a VAT Return is divided.
The VAT Return has 8 boxes to be filled, Every accounting ledger created (if it pertains to inward or outward supply) will have to be reported in any of these boxes
Let me now explain which ledgers should be mapped to each of these boxes
Box 1: Standard rated supplies: Map all your Sales ledger subject to VAT here
Box 2: Supplies subject to the reverse charge provisions: Map all services from foreign vendors here
Box 3: Zero-rated supplies: Map all your export sales to non-GCC Countries here
Box 4: GCC Supplies: Map all your exports to GCC Countries here
Box 5: Exempt supplies: Map all exempted sales ledger here
Box 6: Goods imported into the UAE: map all import purchases here
Box 7: Amendment/correction to output figure: Map the correction ledger of output tax wrongly entered in prior periods here
Box 8: Standard rates expenses: Map all your taxable purchases here
Box 9: Supplies subject to reverse charge provision: If you are selling goods subject to reverse charge, map those ledgers here.
Box 10: Amendments/ corrections to input figures: map the correction ledger of input tax wrongly reported in prior periods
Once you complete the mapping, your VAT Returns will automatically be populated with the respective figures as you finish your accounts.
Setting up Templates
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Click settings under settings tab.
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Click Create Templates under Income tab.
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Click add templates and create the new one.
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Select the Setting Type.
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Enter the Template Name.
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Select Choose Template.
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To change the Field Name you can Enter in Customized Label Name respect to Current Field Name.
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To add Additional Column in Print Invoice use the Column
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Enable the Show this Field in Print checkbox
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To add Additional Field in Print Invoice use the Field and map the account
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Here you can enable the checkbox to print Logo in Invoice
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Here you can select Print Size
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Now Click create
Setting up the email and sms templates
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Click settings under settings tab
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Click Templates
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Go to SMS/Whatsapp templates or E-mail templates
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Customize the SMS or E-mail content
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Then Save
Creating a Organization
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Go to Myreach under settings tab
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Click add option
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The daily reports will be received reports as a mobile number
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Click on save once you are done
Creating a Branch
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Go to Myreach under settings tab
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Click Organisation name, know it will go to Financial Year
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Then click Financial datas
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Click add button and create new branch (Fill the relevant details properly)
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upload your logo and if you want to SHOW LOGO in your transaction print click the box
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Attach your branch signature and seal
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Fill the address information
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Fill the Bank Details
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Click save
Creating a Financial Year
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Go to Myreach under settings tab
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Click Organisation name, know it will go to Financial Year
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Now click add button and create new financial year
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Choose the last financial year, in which all the closing balances will be the opening balance for current financial year.
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Click save
Downloading the Desktop Icon
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Click Download Setup(.exe)
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Then save the downloaded file to get Desktop Icon
Downloading the mobile App
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use to google play store and Download the Reach app
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After downloading the app, you can login with your user ID on your mobile
Customizing the menu
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Click settings under settings tab
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Click customizing
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Go to tab menu
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Click add Module Customization
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Select the default menu name
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You can customize your menu name
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Click Create
Customising the tabs
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Click settings under settings tab
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Click customizing
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Go to tab menu
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Click add Module Customization
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Select the default menu name
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You can customize your menu name
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Click Create
Designing the Invoice
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Click settings under settings tab
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Click Templates
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Invoice/Bill Templates
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Click add a Invoice/Bill Templates
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Select Parent Template
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You can select Placeholder
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Copy the Placeholder Name and paste on the place
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To Design your Templates you can access here
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Once your Design is done you can see a preview and create
Once your users are trained in the software and have practiced the entries in the software, You are ready to roll out for daily transactions.
Importing Customers
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Click settings under settings tab
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Click admin
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Then click on import and select Import customer
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Click on choose file and select the excel
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Click import
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Then map with relevant fields
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Click Save
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Once the file uploaded you can check how much was uploaded and failed
Importing Vendors
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Click settings under settings tab
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Click admin
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Then click on import and select Import vendors
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Click on choose file and select the excel
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Click import
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Then map with relevant fields
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Click Save
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Once the file uploaded you can check how much was uploaded and failed
Importing Products
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Click settings under settings tab
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Click admin
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Then click on import and select Import products
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Click on choose file and select the excel
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Click on overwrite
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Click Import the products button
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In second page map with HSN code
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Now Click on validate HSN
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If the code is validated a pop up appears with success message
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Then map with relevant fields
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Select field for tax percent(18%) and Type(IGST)
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Click save
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Once the file uploaded you can check how much was uploaded and failed
Importing Account Heads
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Click settings under settings tab
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Click admin
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Then click on import and select Import ledgers
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Click on choose file and select the excel
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Click import
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Then map with relevant fields
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Click save
Importing Sales Orders
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Go to sales orders under leads tab
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Click import sales orders
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Click on choose file and select the excel
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Import the products
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Then map with relevant fields
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Click on save once you are done
Importing Quotes
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Go to Quotes under leads tab
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Click import Quotes
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Click on choose file and select the excel
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Select setting type
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Click Import Button
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Map with relevant fields
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Save
Importing Invoices
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Go to invoice under Income tab
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Click Import Invoice
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Click on choose file and select the excel
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Then Click Import
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Then Map with relevant fields
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Save
Importing Receipts
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Go to Receipt under Income tab
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Click Import receipts button
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Click on choose file and select the excel
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Click import Receipt
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Then Map with relevant fields
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Save
Importing Purchase Orders
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Go to Purchase orders under Purchase tab
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Click Import Purchase Orders
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Click on choose file and select the excel
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Select settings type
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Click import Receipt
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Then Map with relevant fields
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Save
Importing Supplier Bills
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Go to Bill under Purchase tab
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Click Import Bill
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Click on choose file and select the excel
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Select settings type
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Click import Bill
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Then Map with relevant fields
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Save
Importing Payments
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Go to Purchase orders under Purchase tab
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Click Import Bill
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Click on choose file and select the excel
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Click import Payment
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Then Map with relevant fields
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Save
Importing Bank Transactions
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Click settings under settings tab
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Click Import under admin
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Then click Import bank Transactions
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Click on choose file and select the excel
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Select settings Payment Account
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click import
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Then Map with relevant fields
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Save
Tax Invoice
How to raise a Tax Invoice under VAT
Tax Invoice is raised by a buyer to a seller in the normal course of business quantifying the terms of the purchase.
conditions for tax Invoice
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This Invoice is raised to another registered business (B2B)
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The value of the Invoice exceeds AED 10,000
Let Me Now Show You How Its Done.
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Click on Income in the top tab menu and choose Invoice
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Click on Add Invoice
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The first tab will prompt you to choose the type of Invoice you choose to raise; Choose Tax Invoice
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The Invoice voucher entry is divided into three sections:
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The first section allows you to fill the basic Invoice details like date, terms, currency and due date
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The second section allows you to choose the products, description, quantity and value
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The final section allows you to enter dispatch details and set reminders for payment followup, Fill the details appropriately
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Once done, you have to option to save the Invoice
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Go to View invoice under Action Tab.
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On saving the Invoice Reach Software will automatically prepare the Invoice
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The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
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It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
SIMPLIFIED TAX INVOICE
How to raise a Simplified Tax Invoice under VAT
Simplified Tax Invoice is raised by a buyer to a seller in the normal course of business quantifying the terms of the purchase. It has much lesser details compared to a regular tax invoice
Conditions for Simplified tax Invoice
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This Invoice is raised to another unregistered person (B2C)
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The value of the Invoice does not exceed AED 10,000
Let Me Now Show You How Its Done.
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Click on Income in the top tab menu and choose Invoice
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Click on Add Invoice
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The first tab will prompt you to choose the type of Invoice you choose to raise; Choose Simplified Tax Invoice
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The Invoice voucher entry is divided into three sections:
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The first section allows you to fill the basic Invoice details like date, terms, currency and due date
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The second section allows you to choose the products, description, quantity and value
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The final section allows you to enter dispatch details and set reminders for payment followup, Fill the details appropriately
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Once done, you have to option to save the Invoice
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Go to View invoice under Action Tab.
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On saving the Invoice Reach Software will automatically prepare the Simplified Tax Invoice
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The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
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It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
MARGIN SCHEME INVOICE
How to raise a Margin Scheme Invoice under VAT
First, Let me briefly explain what a Profit Margin Scheme is and then, I will teach you how this Invoice can be raised.
Normally, Tax is calculated in the total sales value. However, If you have opted for Profit Margin Scheme, you can calculate the tax on the profit margin earned.
Different goods for which profit scheme applies
The following Goods which can be supplied under Profit Scheme
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Second hand goods (like used cars etc)
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Antiques which is over 50 years old
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Collectors items like stamps, coins and currency
This option to calculate tax on profits is given to avoid double taxation
As I explained earlier, If you are supplying any of the above goods, you have an option to choose the profit margin scheme or you can also choose the regular schemes. If you choose the margin scheme, you will not be allowed to claim input tax credits.
If you have opted the regular schemes, you can continue to claim inputs
Conditions for Margin Scheme Invoice
There are three conditions to be met for raising a margin scheme Invoice:
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You must have opted for the Margin Scheme
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They should be purchased from an unregistered person or another margin scheme vendor
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Input tax should not be recovered on the purchase
Let Me Now Show You How Its Done.
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Click on Income in the top tab menu and choose Invoice
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Click on Add Invoice
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The first tab will prompt you to choose the type of Invoice you choose to raise; Choose Margin Scheme Invoice
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The Invoice voucher entry is divided into three sections:
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The first section allows you to fill the basic Invoice details like date, terms, currency and due date
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The second section allows you to choose the products, description, quantity and value. Please note that you have an option to fill the assessable value or the profits made on the products.
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Reach will automatically calculate the taxes on the assessable value instead of the Sale value
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The final section allows you to enter dispatch details and set reminders for payment followup, Fill the details appropriately
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Once done, you have to option to save the Invoice
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Go to View invoice under Action Tab.
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On saving the Invoice Reach Software will automatically prepare the Margin Scheme Invoice
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As you see, the Margin scheme Invoice will not display taxes separately.
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The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
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It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
EXPORT INVOICE
How to raise a Export Invoice under VAT
When goods or services are supplied from UAE to a person located outside UAE, the supply is called an export.
Different goods for which export applies
For the purpose of VAT Treatment, Exports can be classified as:
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Export of goods outside a GCC VAT implementing state
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Export of goods to unregistered recipients in a GCC VAT implementing state
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Export of goods to registered recipients in a GCC VAT implementing state
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Export of goods which require installation or assembly outside the state
Let Me Now Show You How Its Done.
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Click on Income in the top tab menu and choose Invoice
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Click on Add Invoice
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The first tab will prompt you to choose the type of Invoice you choose to raise; Choose Export Invoice
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The Invoice voucher entry is divided into four sections:
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The first section allows you to fill the basic Invoice details like date, terms, currency and due date
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The second section allows you to choose the products, description, quantity and value. Please note that you have an option to fill the assessable value or the profits made on the products
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Exports are taxable at 0% and Reach will automatically pre-select the tax rate
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The final section allows you to enter dispatch details and set reminders for payment followup, Fill the details appropriately
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Once done, you have to option to save the Invoice
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Go to View invoice under Action Tab.
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On saving the Invoice Reach Software will automatically prepare the Export Invoice
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The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
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It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
INVOICE FOR GCC SUPPLY
How to raise a GCC Supply Invoice under VAT
Firstly let us understand what a GCC Supply is
Currently only UAE and KSA have implemented VAT in their countries.
When an export is made to these countries, the sale is at zero percent subject to few conditions
Conditions for Invoice for GCC Supply
There are two conditions to be met for raising a GCC Supply Invoice
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The customer should be registered with VAT authorities in his state
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If he is not registered, he should be below the mandatory threshold
If any of these conditions are not met, then a normal Tax Invoice needs to be raised and the supply will be taxable.
Let Me Now Show You How Its Done.
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Click on Income in the top tab menu and choose Invoice
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Click on Add Invoice
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The first tab will prompt you to choose the type of Invoice you choose to raise; Choose GCC Supply Invoice
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The Invoice voucher entry is divided into three sections:
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The first section allows you to fill the basic Invoice details like date, terms, currency and due date
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The second section allows you to choose the products, description, quantity and value
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The final section allows you to enter dispatch details and set reminders for payment followup, Fill the details appropriately
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Once done, you have to option to save the Invoice
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Go to View invoice under Action Tab.
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On saving the Invoice Reach Software will automatically prepare the GCC Supply Invoice
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The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
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It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
EXEMPT SUPPLY
How to raise a Exempt supply under VAT
Though there is no mandatory requirement to raise an Invoice for exempt supplies, If you are supplying both taxable and exempt supplies, then it becomes important to divide these revenues in your books of accounts and also make sure that the input on exempt supplies in appropriately reduced, as you are not allowed to claim input on exempt supplies. For example if you are a builder, building both residential and commercial buildings, the supply of residential buildings will be exempt and the input on the same is not allowed to be set-off, so you will have to record the exempt supply separately.
Different goods for which supply is exempt
Supply is exempt for the provision of the following goods
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Supply of specific financial services
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Supply of bare land
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Supply of local passenger transport
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Supply of residential buildings through sale or lease, other than those which are zero rated
Let Me Now Show You How Its Done.
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Click on Income in the top tab menu and choose Invoice
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Click on Add Invoice
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The first tab will prompt you to choose the type of Invoice you choose to raise; Choose Exempt supply Invoice
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The Invoice voucher entry is divided into three sections:
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The first section allows you to fill the basic Invoice details like date, terms, currency and due date
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The second section allows you to choose the products, description, quantity and value
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The final section allows you to enter dispatch details and set reminders for payment followup,Fill the details appropriately
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Once done, you have to option to save the Invoice
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Go to View invoice under Action Tab.
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On saving the Invoice Reach Software will automatically prepare the Exempt supply Invoice
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The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
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It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
Learning Objectives:
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what an Invoice is
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when to raise an Invoice
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Understand the format and essentials of an Invoice
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How to raise Invoice using Reach Software
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Where to check this invoice results
What is an Invoice?
Invoice is issued by a seller to the buyer quantifying the terms of purchase and becomes a legal document for the tax authorities
There are two types of Invoices:
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A Retail Invoice or Bill
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A Tax Invoice
When you buy a good from your nearby supermarket, The receipt given to you is a Retail Bill. In the same way, when you book a ticket using the services of a travel agent, the transaction document given by him is called a Tax Invoice.
When to raise an Invoice to your buyer?
The answer to this lies in the nature of your business.
If you are selling goods, you have two options
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In the normal cases, you have to issue an Invoice before the goods are removed from your place
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In the case of continuous supply, you can issue an Invoice before the issuance of the account statement
If you are offering services:
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You have to raise Invoices within 30 days from the supply of services
What is the format of an Invoice?
Let us see the format of the retail and tax Invoice format and understand the key items
A GST Invoice must have the following mandatory fields:
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Invoice number and date
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Customer name
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Shipping and billing address
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Customer and taxpayer’s GSTIN (if registered)**
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Place of supply
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HSN code/ SAC code
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Item details i.e. description, quantity (number), unit (metre, kg etc.), total value
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Taxable value and discounts
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Rate and amount of taxes i.e. CGST/ SGST/ IGST
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Whether GST is payable on reverse charge basis
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Signature of the supplier
If the recipient is not registered AND the value is more than Rs. 50,000 then the invoice should carry:
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Name and Address of the Recipient
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Address of Delivery
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State name and State code
How to raise an Invoice using Reach Accountant?
Now I will show you how to raise a Tax Invoice using Reach Software.
You will first have to design and setup your Invoice parameters. This is done only once
Once you have setup your Invoice, you can then start creating Invoice for your customers.
1. Designing your Invoice
Reach Software provides you a unique option to design Invoices the way you like it. You can either choose to use over 20 pre-designed templates or you can design one yourself.
Let me now show you how to design your Invoice.
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Step 1 – Go to Settings>> Admin>> Invoice Template
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Step 2 – Click on Add Invoice Template
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Step 3 – Now you can start designing your Invoice
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Step 4 – Once done, you can save the template.
Give a name for your Template and Choose a Parent template which you would like to amend.Now you can
create the place holders and paste it in the places you would like to have it. For example, If you like to change the delivery note column to a Bill due date column, create the relevant place holder and paste it in the template area
2. Setting up the Invoice
Now I will show you how to set-up the Invoice parameters. You can choose to create multiple Invoice sequences also in Reach Software. For example, you can create a different sequence for Export Invoices and another sequence for Local Invoices.
Let’s see how to create a Invoice Sequence.
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Step 1 – Go to settings>> Income>> Create Template
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Step 2 – Click on add template
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Step 3 – Now you can start setting up the basic parameters
Assign the Invoice template to a branch and provide a Template name. Choose the Invoice design from the dropdown. You will see the design created by you in the list. Choose the designed Invoice.
Now you can further add parameters relating to Taxes.
Once that is done, you can assign a pre-filled pricelist to this template if that is relevant. A pricelist is created separately if you have differential pricings for customers divided by type or geography. I will teach you about the pricelist in a separate video.
Once you assign a pricelist, you can configure the decimal points for this Invoice template. You can also pre-set the type of Invoice and assign it to a specific account head. Following which you can pre set the terms and notes. Please note that you can also choose to add these details at the time of voucher entry.
Now open a sample Invoice format
Now, you can add additional columns and fields to your Invoice. Let me show you how. The above the line columns can be added here and this will reflect here in the invoice. Below the line columns can be added both as an addition item or a subtraction item and will reflect in your Invoice like this. Now you can choose your email and print preferences. You can choose the size of the paper which you will use to print your Invoice and also decide on the number of copies you choose to print.
Once you finish the print settings, you can now choose the Invoice number sequence and add a starting number. In case you are a Importer or Manufacturer, you can choose the value at which the tax should be calculated. The serial number checkbox is used if you deal with electronic products or spare parts and wish to track your Inventory based on batch or serial sequences
Finally, you can choose if this is a default template Once done, you can now save it.
3. Raising an Invoice
Now that you have set-up your Invoices, you can start creating and issuing Invoices to your customers using Reach Software.
Let me now show you how.
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Go to invoice under income tab
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Click on Add Invoice Button
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Choose the customer to whom you are raising an Invoice.
Reach will automatically populate the customer’s details and also show you the balance outstanding for the customer. In case this is a new customer,
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You can add the details of the new customer by clicking on the “+” button near the customer field.
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You can match this Invoice to a specific cost centre and choose the pricelist relevant to the customer. (you also have an option to pre-assign the pricelist to the customer and reach will automatically pull it out)
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Once marked, you can start adding all the products which you sell in the Invoice now. while adding products, you can add discounts and choose taxes.
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Once an Invoice is completed, you can now create a receipt for the Invoice or adjust the Invoice against advance payments or outstanding credit notes.
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Reach also has the option of pre-setting reminders for your Invoices through email and sms.
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You can print the Invoice and send it to your customer. Alternatively you can also choose to email, sms or whatsapp the Invoice directly to your customer.
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The Invoice shows the payment and the shipment status. You can do further changes to the Invoice from the Action Tab.
The Invoice will have three segments, The first segment shows details and type of the Invoice. The second shows the Billing particulars and the last segment shows other key details. Let us now raise a sample Invoice.
Now your Invoice is completed and ready to be sent to your customer.
Once you save the Invoice. The Invoice appears in the list of Invoices.
Receipts
What is a Receipt Voucher?
A receipt voucher is given when you receive money from a person. The money can be recieved as Cash, Cheque or as Bank Transfer. This voucher is the proof that payment has been received.
You might receive money
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When you make a cash sale
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Against a previous Credit Invoice
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As an advance towards future supply
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On sale of Asset
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As a Hand Loan
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Various other scenarios
In most of these scenarios, the payer will request a receipt from you.
How to raise Receipt Voucher using Reach ?
Now that you know what is receipt voucher and when it is issued.Let us see, How to raise a receipt voucher using Reach Accounting Software.
There are three types of receipt voucher :
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Direct receipt voucher
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Payment Against invoice
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For Advance against invoice
In most of these scenarios, the payer will request a receipt from you.
Direct receipt voucher
A direct receipt voucher is made to acknowledge a cash sale, sale of an asset or any other windfall receipts. This attracts taxes as well so its important to record this in reach. Receipt can be made as cash, cheques or by bank transfers.
Now let us see how a direct receipt voucher is made.
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Go to receipt under income tab.
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Click on add receipt.
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Select the direct receipt in payment type.
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Select date.
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Select Payment mode.
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Now select the sales in account and give the amount.
-
In case you like to add taxes to the payments made, make sure the taxes are enabled while creating an accounting ledger.
-
Add a notes for your reference.
-
Payment added successfully.
Payment Against bill
A payment against invoice is made towards a credit invoice raised earlier to adjust the customer account for balance payments.
Let me show you how it’s done.
-
Go to receipt under income tab.
-
Click on add receipt.
-
Select Payment against Invoice in payment type.
-
Now select date.
-
Give the cheque number.
-
Select the payment mode.
-
Mention the amount here.
-
Select the customer.
-
Add a note for your reference.
-
Reach automatically open and display all the outstanding invoices for that customer. Make sure you adjust each of the invoice which needs to adjusted.
-
Click save. Payment added successfully.
Advance against invoice
Manytimes advance payments are made in the course of normal trade. Such advances are adjusted against future invoices of the customer.
Now let me show you how advance payments are recorded in reach.
-
Go to receipt under income tab.
-
Click on add receipt.
-
Select for advance against invoice in payment type.
-
Now select date.
-
Give the cheque number.
-
Select the tax .After GST, these advances also attract taxes and hence it becomes important to record advances promptly.
-
Now select the mode of payment.
-
Mention the amount here.
-
Select customer.
-
Add a note for your reference.
-
Click save Payment added successfully.
Reach automatically creates relevant accounting entries in the Daybook, ledgers, Financial and Tax Statements as well, so you can save time on separate accounting entries.
How to prepare a credit note in Reach Software?
When you return your goods to a nearby store, the shopkeeper sometimes would give you a receipt which you can use to exchange or set-off against future purchases. This receipt is known as a credit note.
In business, Credit notes are issued for the following reasons:
-
For Sales Returns
-
To provide a Sales Discount which was not known at the time of making the Invoice
-
To account for shortages in delivery
Credit notes can be adjusted against current outstanding Invoices or might be allowed to be set-off against future Invoices. Sometimes, it might be followed with a cash refund too.
1. Adjusting the credit note against an existing Invoice
-
Go to credit note under income tab.
-
click on add credit note.
-
Choose the customer to whom you are raising an credit note. Reach will automatically populate the customer’s details.
-
Select date.
-
Select products details.
-
Enable the checkbox.
-
Reach automatically open and display all the invoices for that customer. Make sure you adjust each of the invoice which needs to adjusted.
-
Click save.
2. Adjusting an Invoice against a credit note
-
Click invoice under income tab.
-
Click view invoice and scroll down.
-
Click credit note.
-
Add credit note.
-
Now credit note page appears. Reach will automatically populate the customer’s details.
-
Select products details
-
Go to save.
3. Making a refund payment against a credit note
-
Go to credit note under income tab.
-
click on add credit note.
-
Choose the customer to whom you are raising an credit note. Reach will automatically populate the customer’s details
-
Select date.
-
Select products details
-
Enable the checkbox
-
Reach automatically open and display all the invoices for that customer. Make sure you adjust each of the invoice which needs to adjusted.
-
Click save.
-
Go to action button and click add payment.
-
Now payment page appears. Add payment details.
-
Click save.
Now credit note Status will change paid
How to Taxable purchase in Reach Accounting Software
A Taxable purchase is the purchases which you make locally of goods or services.
The tax paid on taxable purchase can be adjusted against the tax collected on sales; This is known as input tax credit
Conditions for Input tax Credit in a Taxable Invoice:
There are three conditions to be met for claiming input tax credit in a taxable Purchase
-
This purchase should be used to make taxable supplies
-
You have received a tax invoice from the supplier
-
You have paid for this supplier invoice
Let Me Now Show You How Its Done.
-
Click on Expense in the top tab menu and choose Bill
-
Click on Add Bill
-
The first tab will prompt you to choose the type of Invoice you choose to raise; Choose Taxable Purchase
-
The Bill entry is divided into three sections
-
The first section allows you to fill the basic Supplier Invoice details like date, supplier reference, currency and due date
-
The second section allows you to choose the products, description, quantity and value of the purchase along with taxes
-
The final section allows you to attach the bill copy and set reminders for payment followup, Fill the details appropriately
-
Once done, you have to option to save it
-
Go to View Bill under Action Tab.
-
On saving the Invoice Reach Software will automatically record the supplier bill
-
The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
-
The VAT payable ledger is automatically adjusted for input credits
-
It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
How to record a Self billed Purchase in Reach Accounting Software
Normally, in the due course of business, your supplier will raise Invoices to you which is recorded in your software.
However, in some cases it might not be practically possible for him to raise an Invoice and you will raise a bill on his behalf vis-à-vis an agreement you get into.
For example, In case of oil supply where there is wastage or evaporation and hence the quantity can only be determined at the time the goods reach your business place.
Conditions for Self billed Invoice :
There are two conditions to be met for a self billed invoice
-
Supplier should be VAT registered and should not raise invoices on you
-
There should be an agreement between the supplier and self biller which contains the transaction period and terms of the supply
Let Me Now Show You How Its Done.
-
Click on Expense in the top tab menu and choose Bill
-
Click on Add Bill
-
The first tab will prompt you to choose the type of Invoice you choose to raise; Choose Taxable Purchase
-
The Bill entry is divided into three sections
-
The first section allows you to fill the basic Supplier Invoice details like date, supplier reference, currency and due date
-
The second section allows you to choose the products, description, quantity and value of the purchase along with taxes
-
The final section allows you to attach the bill copy and set reminders for payment followup, Fill the details appropriately
-
Once done, you have to option to save it
-
Go to View Bill under Action Tab.
-
On saving the Invoice Reach Software will automatically record the supplier bill
-
The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
-
The VAT payable ledger is automatically adjusted for input credits
-
It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
How to raise a Import of Services Purchase in Reach Accounting Software
Recording an Import of Services is more or less the same as recording any other purchase.
The key difference is in the application of Reverse Charges on the purchase.
What is reverse charge
Normally, the responsibility to levy, collect and pay tax to the government is on the person who is making taxable supplies i.e. on the supplier. This is known as forward charge mechanism.
However, In case of imports and on purchase of certain specified goods, the responsibility of paying taxes is on the recipient. This is known as Reverse Charge mechanism.
How it works :
-
Record the Vendor or Suppliers Bill
-
Reach will automatically populate the VAT payable on reverse charge ledger
-
Make a payment of these taxes before you file the return
-
Journalize appropriately to transfer the payment to input ledger
-
This will give you an adjustment against your VAT payables
Let Me Now Show You How Its Done.
-
Click on Expense in the top tab menu and choose Bill
-
Click on Add Bill
-
The first tab will prompt you to choose the type of Invoice you choose to raise; Choose Import of Services
-
The Bill entry is divided into three sections
-
The first section allows you to fill the basic Supplier Invoice details like date, supplier reference, currency and due date
-
The second section allows you to choose the products, description, quantity and value of the purchase along with taxes
-
The final section allows you to attach the bill copy and set reminders for payment followup, Fill the details appropriately
-
Once done, you have to option to save it
-
Go to View bill under Action Tab.
-
On saving the Invoice Reach Software will automatically record the supplier bill
-
The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
-
The VAT payable ledger is automatically adjusted for input credits
-
It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
How to record a suppliers Invoice for Import of Goods
Recording an Import of Goods is more or less the same as recording any other purchase.
The key difference is in the application of Reverse Charges on the purchase.
What is reverse charge
Normally, the responsibility to levy, collect and pay tax to the government is on the person who is making taxable supplies i.e. on the supplier. This is known as forward charge mechanism
However, In case of imports and on purchase of certain specified goods, the responsibility of paying taxes is on the recipient. This is known as Reverse Charge mechanism
How it works :
-
Record the Vendor or Suppliers Bill
-
Reach will automatically populate the VAT payable on reverse charge ledger
-
Make a payment of these taxes before you file the return
-
Journalize appropriately to transfer the payment to input ledger
-
This will give you an adjustment against your VAT payables
Let Me Now Show You How Its Done.
-
Click on Expense in the top tab menu and choose Bill
-
Click on Add Bill
-
The first tab will prompt you to choose the type of Invoice you choose to raise; Choose Import of Goods
-
The Bill entry is divided into three sections
-
The first section allows you to fill the basic Supplier Invoice details like date, supplier reference, currency and due date
-
The second section allows you to choose the products, description, quantity and value of the purchase along with taxes
-
The final section allows you to attach the bill copy and set reminders for payment followup, Fill the details appropriately
-
Once done, you have to option to save it
-
Go to View Bill under Action Tab.
-
On saving the Invoice Reach Software will automatically record the supplier bill
-
The daybook, ledgers, trial balances and financial statements are automatically posted and prepared
-
The VAT payable ledger is automatically adjusted for input credits
-
It will also auto-populate the relevant tax codes in the VAT forms so you will not have to prepare them manually later.
Supplier Bills
When you buy goods in the due course of business, you supplier raises an Invoice demanding a payment for the same. The Invoice generally specifies the payment terms and taxes for which Input credit can be claimed. This Invoice needs to be recorded in the Accounting Software as soon as it is raised. Recording the Invoice helps you understand your Financial Status correctly.
Let me now show you how a supplier Invoice can be recorded in Reach.
-
Go to Bill under expense tab.
-
Add Bill Button
-
Select vendor details.
-
Bill date
-
Once marked, you can start adding all the products.
-
While adding products, you can choose taxes.
-
Once a Bill is completed, you can now create a payment for the bill (or) adjust the bill against advance payments (or) outstanding debit notes
-
Reach also has the option of pre-setting reminders for your bills through email and sms.
-
Click save
Payment Vouchers
What is a payment voucher?
In the course of business multiple payments are made everyday. For example, Payments are made for Salaries, Travelling and Other office expenses. Payments are also made towards buying assets for the business. Payments can be made towards a current expense, as an advance to a supplier or towards an outstanding supplier Invoice. Payments are mostly made in cash, cheque or as Bank transfers. Everytime a payment is made, A voucher has to be prepared in the accounting software and be attested by the payee. This is to have a proof of payment for audit and tax reasons.
How to raise a payment voucher using Reach Software?
Now that you know what is Payment voucher and when it is issued.Let us see, How to raise a Payment voucher using Reach Accounting Software.
There are three types of payment voucher.
-
Direct Payment Voucher
-
Payment Against bill
-
For Advance against Expense
Direct Payment Voucher
First, I will show you how a Direct Payment Voucher is made. You should create a direct payment voucher for recording cash expenses like travelling, office expenses and wages. Now let see how to raise direct payment voucher.
-
Go to payment under expense tab.
-
Click on add payment button.
-
Select the direct payment in payment type.
-
Select date and payment mode.
-
Now select the expense in account and give the amount.
-
In case you like to add taxes to the payments made, make sure the taxes are enabled while creating an accounting ledger.
-
Add a notes for your reference.
-
Now Click Save. Payment added successfully.
Payment Against bill
Next, Let us see how a payment against a previously recorded bill is made. Such payment is made if the supplier has issued a bill already which has been recorded in Reach Software and subsequently payment is made on the due date.
-
Go to payment under expense tab.
-
Click on add payment button.
-
Select Payment against bill in payment type.
-
Give the cheque no and date.
-
Select vendor.
-
Mode of payment.
-
Add a note for your reference.
-
Now adjust the amount here.
-
Now Click Save. Payment added successfully.
For Advance against Expense
Now let us see how an Advance made against an expense is recorded in Reach Software. In the course of business, we might come across a scenario where we make some advance payments to suppliers which gets adjusted later when the supplier sends a bill.
-
Go to payment under expense tab.
-
Click on add payment.
-
Select for advance against bill in payment type.
-
Now select date.
-
Select the tax .After GST, these advances also attract taxes and hence it becomes important to record advances promptly.
-
Give the cheque number.
-
Select Vendor.
-
Now select the mode of payment
-
Mention the amount here.
-
Add a note for your reference.
-
Click save Payment added successfully.
Once Bill are made, the Collection Report gets updated automatically in Reach. The Overdue bill reports are adjusted too.
What is a Debit note? When is it issued?
In the course of business, many times we return the goods purchased from the supplier.
Debit notes are issued:
-
For Purchase Returns
-
To provide a upward revision of Invoices
-
To account for shortages in delivery
Debit notes can be adjusted against current outstanding supplier bills or might be allowed to be set-off against future Bills.
Sometimes, it might be followed with a cash refund too.
Adjusting the debit note against an existing bill
-
Go to debit note under expense tab.
-
Click on add debit note.
-
Choose the vendor to whom you are raising an debit note. Reach will automatically populate the vendors details.
-
Select Date.
-
Select products details.
-
Enable the checkbox to match expense. Reach automatically open and display all the Bill for that vendor. Make sure you adjust each of the bill which needs to adjusted.
-
Click save.
To account for shortages in delivery
Making a refund payment against a debit note
-
Go to debit note under expense tab
-
Click on add debit note.
-
Select vendor name and Date.
-
Select products details.
-
Enable the checkbox.Reach automatically open and display all the Bill for that vendor. Make sure you adjust each of the bill which needs to adjusted.
-
Click save.
-
Go to action button and click add receipt.
-
Now payment page appears, add payment details.
-
Click save
Know credit note Status will change paid
Recording Bank Deposits
In the normal course of business, you will be depositing Cash and Cheques collected from the customer into the Bank Account. This needs to be recorded into the Accounting Software.
Let me now show you how a bank deposit is recorded in Reach Accounting Software.
-
Go to contra under account tab.
-
Add contra.
-
Select Amount.
-
Select Date.
-
From cash and To Bank name.
-
Add a notes for your reference.
-
Click create. Payment Deposited successfully.
Recording Bank Withdrawals
Often, Cash is withdrawn from the Bank account for Petty Cash Expenses or to make other payments in Cash. When Cash is withdrawn from the bank, It needs to be recorded into the Accounting Software. Let me now show you how a Bank withdrawal in Reach Accounting Software
-
Go to contra under account tab
-
Add contra.
-
Select Amount.
-
Select Date.
-
Select from bank name and To cash.
-
Add a notes for your reference.
-
Save payment Withdrawals successfully.
Recording Cheque Returns
Since we record every cheque which is deposited into the bank, it is important to reverse it if the cheque issued by a customer returns from the bank. This means that the customer account has to be reversed and the Bank balance reduced. Now, I will show you how a Cheque return is recorded in Reach Accounting Software.
-
Go to journal under accounting tab.
-
Click on add journal.
-
Now Add Description.
-
Select date.
-
Select customer name.
-
Add debit amount.
-
Select cheque in hand ledger.
-
Add credit amount.
-
Click Save.
Reconciling Bank Transactions
The Balance shown in the Bank Ledger of the software and the Actual Balance in the Bank does not tally often.
In most cases, This is due to the following reason:
-
The time delay on the deposited cheques to be cleared.
-
The time delay on the issued cheques to hit the account.
-
Bank charges levied by the Bank.
At the end of every month, it is habitual to do a Bank Reconciliation to ensure that these transaction are accounted and to ensure that the Bank Account shows a true and correct picture.
Now I will show you how a Bank Reconcilation is done using Reach Accounting Software
-
Go to reports.
-
Click Bank Reconciliation Report under Accounting Reports.
-
Search date and cheque number.
-
Go to select cheque clearance date
-
Now Click Reconciliation report
-
Here you can see the total number of cheques. i.e., Cheque issued, cleared and non cleared .
-
Finally you can see your “balance as per bank statement”.
Recording Staff Salary Advances
In the normal course of business, you will be issuing Advances to your Staffs against Salary or for Expenses. This needs to be recorded into the Accounting Software.
Let me now show you how a Staff Advance is recorded in Reach Accounting Software.
-
Go to Journal under accountant tab
-
Click add journal option and add Salary Advances entory
-
Add a Description for your reference.
-
select the Date, Ref No, Here is the Proof
-
Now select Staff Salary Advances ( current liability) and add amount under debit column
-
Select bank or cash and add amount under credit column
-
Click save
-
Now go to Journal under accountant tab
-
Click add journal option now add salary
-
Add a Description for your reference.
-
select the Date, Ref No, Here is the Proof
-
Select Salary ledger and add Total salary amount under debit column
-
Now select Staff Salary Advances ( current liability) and add advances amount under Credit column
-
Select bank or cash and add amount under credit column
-
Then save
Recording Salary and Wages
Now, Let me show you how monthly Salary and Wages due and paid can be recorded in Reach Accounting Software
-
Now go to Journal under accountant tab
-
Click add journal option now add salary
-
Add a Description for your reference
-
Select the Date.
-
Select Salary ledger and add Total salary amount under debit column.
-
Now Select bank or cash and add amount under credit column.
-
Then save
Let me now show you how a Staff Advance is recorded in Reach Accounting Software.
Recording PF and ESI Payments
The PF and ESI due is recorded in Reach Software as explained in the previous segment. Payment of PF or ESI is done using a regular payment voucher.
Let me now show you how.
-
Now go to Journal under accountant tab
-
Click add journal option now add salary and PF,ESI entry
-
Add a Description for your reference.
-
Select the Date.
-
You can add the details of the new Ledger by clicking on the “+” button near the Ledger field.
-
Select Salary ledger and add salary amount under debit column.
-
Select bank or cash and add amount under credit column.
-
Select ESI Employee payables ( current liability) and add amount under Credit column.
-
Select PF Employee payable ( current liability) and add amount under Credit column.
-
Then save
-
Now go to Journal under accountant tab
-
Click add journal option now add salary and PF,ESI entry
-
Select ESI Employee payable ledger and select amount under debit column.
-
Select PF Employee payable ledger and select amount under debit column.
-
Select ESI Employer contribution ledger and select amount under debit column.
-
Select PF Employer contribution ledger and select amount under debit column.
-
Select bank or cash and add amount under credit column
-
Then save
When You Make The Payment To Government, Now You Need To Pass Journal Entries.
Recording payments made to Owner/ Partner/ Director (salary)
When the owner makes payment to himself, it needs to be recorded in the Accounting Software.
The question to how it should be recorded depends on the type of entity you are dealing with.
-
If the organisation is a Proprietorship entity, The payments are recorded as “Drawings”.
-
If the organisation is a Partnership, The payments are recorded as Partners Remuneration or Interest on Capital and adjusted to the Partners Capital Account.
-
If the organisation is a Limited Company, The payments are recorded as “Directors Remuneration”
Now, Let me show you how these payments are recorded in Reach Accounting Software.
Director Salary
-
Go to payment under Expense tab
-
Click Add Payment
-
Select the direct payment in payment type.
-
Select date and payment mode
-
Now select the “Directors Remuneration ledger in account and give the salary amount.
-
Add a notes for your reference.
-
Now Click Save. Payment added successfully.
Petty Cash Management
Every business earmarks some cash for daily office expenses done in cash. The cashier is usually made responsible for this fund and day-to-day expenses are met out of this Imprest. This fund is refilled everyday or week once it is used. Let me show you how petty cash is accounted for.
-
Go to payment under Expense tab.
-
Click Add Payment button.
-
Select the direct payment in payment type.
-
Select date.
-
Select payment mode.
-
Now select the Petty cash ledger in account Petty cash means daily office expenses(Water expenses, Tea,coffee expenses,travelling expenses,) and give the amount.
-
In case you like to add taxes to the payments made, make sure the taxes are enabled while creating an accounting ledger.
-
Add a notes for your reference.
-
Now Click Save. Payment added successfully.
Expenses spent by Boss
Many times, The boss uses his personal credit card or cash to buy stuffs for the business. It gets settled to the boss and also needs to be recorded as a Business Expense. Now let me show you how such expenses are accounted for in Reach Software
-
Go to journal under accounting tab.
-
Click on add journal.
-
Now Add Description.
-
Select date.
-
Select Loan from Director Ledger or Capital Ledger and Add credit amount.
-
Select Expenses Ledger and Add debit amount.
-
Now click Save.
-
Click journal under accounting tab.
-
Add Journal.
-
Now select Loan from Director Ledger and Add Debit amount.
-
Select Bank and Add credit amount.
-
Click Save.
When office will Settled to the boss, aghani go to add journal
Advances given for Expenses
When you give Advance Imprest to Staffs for incurring some Cash expenses, it need to be accounted for. The cash holder might come back and provide bills for the same and return excess cash. This needs to be accounted too.
Now I will show you how this can be managed in Reach Software.
-
Go to Contra under accounting tab.
-
Click add contra button.
-
Add Advances Amount.
-
Select Date.
-
Select From Bank details.
-
Now select To Bank or cash.
-
Add a notes for your reference.
-
Click save.
Recording Asset Purchase
When you buy a Fixed Asset, like machinery, furniture etc you incur ancillary expenses on it life transport, insurance, registration etc. All the expenses incurred till the point such asset is put to use is capitalised and added to the cost of the asset. This cost needs to be recorded in the Accounting Software.
Let me now show you how this is done:
-
Go to Journal under accountant tab
-
Click add journal Button
-
Add a Description for your reference.
-
Select the Date.
-
Fill the Reference Number and click Here is the Proof.
-
Now select fixed asset (Computer) and add amount under debit column.
-
Select bank or cash and add amount under credit column.
-
Click save.
Recording Asset Sale
When an Asset is sold, the receipt needs to be recorded in the software and any profits arising thereof recorded. Let me now show you how this transaction is recorded in the accounting software.
Let me now show you how this is done:
-
Click Settings, under Settings tab.
-
Click Account Ledger, under accounting tab.
-
Now click add a account button.
-
Then Select Group (Other expenses)
-
Add ledger name (loss on fixed asset).
-
Add Opening Balance( 0).
-
Now click create.
-
Go to Journal under accountant tab
-
Click add journal Button
-
Add a Description for your reference.
-
Select the Date.
-
Fill the Reference Number and click Here is the Proof.
-
Now select bank or Cash and add amount under debit column.
-
Select fixed asset (Computer) and add sale amount under credit column.
-
Now select loss on fixed asset ledger and add loss amount under credit column.
-
Then save.
Recording Depreciation
Depreciation is recorded in the software while doing the year end processing. This needs to be recorded at a fair percentage calculated according to the wear and tear or according to the prescribed laws.
Let me show you how depreciation is recorded in Reach Accounting Software.
-
Click Settings, under Settings tab.
-
Click Account Ledger, under accounting tab.
-
Now click add a account button.
-
Then Select Group (Other expenses)
-
Add ledger name (Depreciation).
-
Add Opening Balance( 0).
-
Now click create.
-
Go to Journal under accountant tab
-
Click add journal Button
-
Add a Description for your reference.
-
Select the Date.
-
Fill the Reference Number and click Here is the Proof.
-
Now select Depreciation ledger and add amount under credit column.
-
Select fixed asset (Computer) and add sale amount under debit column.
-
Then save.
Recording a Loan
A Loan or a Debt is raised for a business to finance its trade or Investment.
Loans can be recieved as Term Loans, Asset Loans or Over drafts.
When a Loan is recieved it has to be recorded in Reach Accounting Software.
Let me now show you how its done.
-
Go to Journal under account tab
-
Add Journal Button
-
Now add Description.
-
Then Select date.
-
You can add the details of the new ledger by clicking on the “+” button near the account field.
-
Select group.
-
Then Add ledger name.
-
Now Click Create.
-
Now select Loan ledger and add amount under Credit column
-
Select bank and add amount under debit column.
-
Now Click Save.
Recording an EMI Payment
When a term loan or an Asset loan is repaid in Equated Monthly Instalments, The payment includes both Principal and Interest repayments. We will have to calculate the Interest component in the EMI and record it as an Expense. The loan account has to be reduced to the extent of the principal component.
Let me now show you how its done.
-
Go to Journal under account tab.
-
Add Journal Button.
-
Now add Description.
-
Then Select date.
-
You can add the details of the new ledger by clicking on the “+” button near the account field.
-
Select current liability group.
-
Then Add ledger name.
-
Now Click Create.
-
Now select Loan ledger and add amount under Credit column
-
Select bank and add amount under debit column.
-
Now Click Save.
-
Select ledger (Loan from Bajaj) and add amount under debit column.
-
Then select Interest on loan and add amount under debit column.
-
Select bank and add amount under Credit column.
-
Now Click Save.
Recording Partners Capital
When the partner brings in Capital to fund the business, it needs to be recorded in the software. This transaction needs to be journalised and recorded to give effect in the Balance sheet.
Now let me show you how a capital is recorded.
-
Go to Journal under account tab.
-
Add Journal Button.
-
Now add Description.
-
Then Select date.
-
You can add the details of the new ledger by clicking on the “+” button near the account field.
-
Select Equity group.
-
Then Add ledger name.
-
Now Click Create.
-
Select ledger (Partner Capital) and add amount under Credit column.
-
Select bank and add amount under Debit column.
-
Now Click Save.
In this section, Let us discuss the Compliance Requirements of VAT along with a step-by-step procedure on How to file VAT Returns.
Frequency of Returns to be Filed under VAT
| Return Filing Period | Applicability of VAT Return |
|---|---|
| Quarterly Return | Most of the businesses in UAE will be filing the VAT Returns on a quarterly basis |
| Monthly Return | Only certain classes of businesses will be asked to file VAT Return on a monthly basis. This is yet to be notified. |
What are due dates for filing different Tax Returns under VAT
| Return Filing Period | Due Date |
|---|---|
| Quarterly Return | 28th day of the month succeeding the Quarter |
| Monthly Return | 28th day of the suceeding month |
How to pay VAT?
The VAT payable determined after off-setting the Output VAT with Input VAT needs to be paid through the FTA portal. The Online VAT payment facility will be provided in the FTA portal, wherein the registered businesses can remit the VAT payable.
Getting Refunds
Refunds happen when either the Seller is buying Taxable goods and selling exempt or when the seller is an exporter who is entitled to claim refunds.
Format of VAT Returns
The UAE VAT Executive Regulations has prescribed the mandatory information which needs to be declared by the registered person in his VAT Return. The following are the details which need to be contained in the VAT Return:
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The name, address and the TRN of the Registrant: The Tax Registration Number (TRN) provided by the FTA needs to be furnished in all the VAT Returns. Based on the TRN number, the name and address details are expected to be auto-populated.
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The date of submission: The VAT returns need to be submitted within 28 days following the end of the VAT return period. Here, the date on which returns are submitted will be captured.
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Tax Period: Tax Period is the return period to which the Tax Return relates. For example, for January to March’18, it will be Jan-Mar’18.
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Details of the Supplies (sales) made in the VAT return period: You need to furnish the value of supplies (sales) and output VAT collected during the return period. Also, the supplies need to be categorized into the following:
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Standard Rated Supplies: This includes all the domestic supplies on which 5% VAT is applicable. Further, these details need to be furnished at the emirates level as shown below:
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Standard rated supplies in Abu Dhabi
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Standard rated supplies in Dubai
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Standard rated supplies in Sharjah
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Standard rated supplies in Ajman
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Standard rated supplies in Umm Al Quwain
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Standard rated supplies in Ras Al Khaimah
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Standard rated supplies in Fujairah
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Zero rate Supplies: The details of notified supplies which are under Zero-rated list needs to be furnished in this section.
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Exempt Supplies: Supplies such as financial services, residential building etc. which are notified as exempt supplies need to be captured here.
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Reverse Charge Supplies: Supplies such as imports and other notified supplies on which the recipient or buyer is liable topay VAT on reverse charge mechanism
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Intra GCC Supplies: Supplies made to customers registered for VAT in other GCC implementing states and for which the place of supply is the other GCC implementing state needs to be captured here.
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Details of the expenses (Purchases) made in the VAT return period: You need to declare the value of expenses incurred on which you are eligible to recover Input Tax and the amount of Recoverable Input Tax in the VAT return period. Please note, the value of input tax credit which is restricted or which you are not eligible to claim, should be reduced from the total and only the net value needs to be mentioned. Also, the total expenses and recoverable Input Tax needs to be shown separately for standard rated expenses (on which 5% VAT was paid) and the expenses, subject to reverse charge.
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The total value of Due Tax and Recoverable Tax: You need to mention the total output tax collected and recoverable input tax during the return period.
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Payable Tax: This will be arrived at, after adjusting the Output Tax with Recoverable Input Tax. If output VAT is higher than input VAT, it will result in VAT Payable. Otherwise, it will be VAT refundable which can be carried forward to next return period or can be claimed as a refund
Filing VAT Returns
Given below is a step-by-step procedure to file your VAT Return using Reach Accounting Software
- Generate the VAT return file from Reach accounting software.
- Login to FTA e-tax portal using your login credentials and upload the return file.
- Validation and Auto Fill VAT Return Details.
- Submit VAT Return
