VAT Included (AR, AP, and GL)

Certain companies may choose to include the VAT in the purchase price of an item, rather than listing it separately on the invoice.  In these cases, MAC-PAC will calculate what percentage of the price is actually VAT and will post the correct portion of the total amount to the sales/purchases and VAT accounts. 

For Accounts Receivable, you must specify on each sales order (or other open item) whether VAT is included in the price or listed as a separate item.  This value defaults from the Customer Master File.  You can also specify a system-wide default value on Reference File category 300 (Accounts Receivable Defaults), which will be used when defining customers.  For Accounts Payable, the VAT Included option is specified on the Vendor Master File; a default value is specified on Reference File category 206, Vendor Defaults.

The default value for the VAT Included flag is placed on the Order Processing screen where the customer order and invoice are entered, the Accounts Receivable screen where manual invoices are entered,  and Accounts Payable screens where the vendor invoice is entered.  This information can be modified.  However, the flag must apply to the entire invoice.  This means that if VAT is included in the price for one line on the invoice, it must be included for all lines.  In addition, the price must be entered manually for all orders and invoices where VAT is included.

For Accounts Receivable, you can specify a limit below which VAT will not be listed as a separate line item on the invoice.  This limit is specified on Reference File category 307, A/R VAT Defaults.

For the General Ledger, you must specify whether to include VAT in the transaction amount for the account.  This option is specified on the Journal Entry Validation and Recurring/Standing Journal Validation header screens.  If the VAT included flag is set to ‘N’ (no), then the total amounts of all lines with the same VAT code are accumulated and the VAT amount is calculated on top of the accumulated amount.  If the VAT included flag is set to ‘Y’ (yes), then the VAT amount is already included in the entered amounts.  Thus, the total amount of all lines with the same VAT code are accumulated, and this total amount is separated into the goods value amount (which is equal to net value without VAT) and the VAT amount.  To view this information, a VAT Summary window can be displayed on the detail screen by pressing F21.  This window displays the VAT related goods value and the VAT total amount by VAT code.