General purchases and VAT

ERPNext User Forum
1

In NL, and in Europe in general, VAT paid to a supplier and Vat that
has to be paid to the government can be compensated.

Therefore it is important to account all VAT paid, including things
like petrol, stationary etc.

What would be the easiest way to do so??

Say I have an invoice for 25 stationary articles; of course i do not
want to enter all these individual items in the Item Masters.

I am now considering to make a couple of “group items” eg
“general_support_19%” and when entering the purchase invoice just lump
all 10% Vat items in this.

At the other hand in the Chart of Accounts Assets,Expenses, Indirect
expenses there is a long list to book such expenses (eg Print and
Stationary).

So, I guess, with a cash or bank voucher, I can enter the amount here,
but the recording of the VAT would be lost, and also the purchases
would not be recorded under a supplier, but could be entered as a
remark/note on the voucher.

I guess I have to debit the cash or bank account and than credit the
Print&Stationary account and the VAT account.

Could you please advice how to handle this type of very common
business transactions.

2

Hi Robert,

Replies below:

On 24-Feb-2012, at 10:39 PM, robert wrote:

In NL, and in Europe in general, VAT paid to a supplier and Vat that
has to be paid to the government can be compensated.

Therefore it is important to account all VAT paid, including things
like petrol, stationary etc.

What would be the easiest way to do so??

Say I have an invoice for 25 stationary articles; of course i do not
want to enter all these individual items in the Item Masters.

I am now considering to make a couple of “group items” eg
“general_support_19%” and when entering the purchase invoice just lump
all 10% Vat items in this.

You can directly make a Journal Voucher

Debit - Stationary - xx Euro
Credit - Bank or Cash - xx Euro

This is fine for small accounts, you will not be able to accrue it to a supplier. If you want to do the accrual then payment then

Debit Stationary - xx
Credit Supplier - xx
Debit Supplier - xx
Credit Bank - xx

This way you track the supplier (I know many companies use Option 1)

At the other hand in the Chart of Accounts Assets,Expenses, Indirect
expenses there is a long list to book such expenses (eg Print and
Stationary).

So, I guess, with a cash or bank voucher, I can enter the amount here,
but the recording of the VAT would be lost, and also the purchases
would not be recorded under a supplier, but could be entered as a
remark/note on the voucher.

I guess I have to debit the cash or bank account and than credit the
Print&Stationary account and the VAT account.

Could you please advice how to handle this type of very common
business transactions.

Took VAT, you just need to reduce your expense and pass the amount to your VAT account

If you expense is 20 out of which VAT is 5

Debit Stationary 15
Debit VAT 5
Credit Bank 20

best,
Rushabh