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 Purchase orders and VAT

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Posted by chazzer

Purchase orders and VAT

The invoices we receive from suppliers does not match up with the purchase orders that we produce on Easify.

For example, we have 2 products on a purchase order..........

Item 1 - quantity 120 @ £4.82 each (cost price in products) total £578.40

item 2 - quantity 54 @ £3.99 each (cost price in products) total £215.46

Sub total - £793.86

VAT is standard rate @20%

so far so good

But then Easify adds £158.40 VAT, which is 19.953% and not 20%

The total purchase order value is then £952.26 instead of £952.63. It's not a huge difference, but does mess up our records. Why does it do that and is there a fix for it?

I've also noticed that the margin and VAT is incorrect for products as well. For example we have inputted a product with a cost price of 35p with a margin of 15% which easify then shows a trade price of .4118p which is actually 17.657% and not 15%? The VAT inclusive trade price is then .4942 which is near enough to an extra 20% on top of the .4118p figure. I don't understand why this happens or how we can rectify it without producing everything manually

Please help

Thanks

Gavin

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Posted by John

Re: Purchase orders and VAT

Because there are different ways of calculating VAT we have provided a VAT tweak box on Purchase Orders.

You can use this box to state exactly how much VAT your supplier is charging:

Happy to help - John (Easify Support)

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Posted by chazzer

Re: Purchase orders and VAT

John said:

Because there are different ways of calculating VAT we have provided a VAT tweak box on Purchase Orders.

You can use this box to state exactly how much VAT your supplier is charging:

Thanks for the reply. What other ways are there of calculating VAT? Isn't it just cost price multiplied by 1.2, assuming the rate is 20%?

This would mean that we have to manually change the VAT for every product wouldn't it?

Thanks

Gavin

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Posted by John

Re: Purchase orders and VAT

No you don't need to change each product, just the VAT tweak box to reflect the amount of VAT your supplier is charging you.

Easify uses the ticket price VAT model to work out the VAT on an order.

This model is geared toward a retail environment where the gross total needs to add up to exactly what the individual ticket prices would add up to. Therefore the tax is calculated on the individual product.

The model you are thinking of calculates the VAT based on the subtotal (net total).

This is not a good VAT model to use in a retail environment as the Gross total won’t always equal the sum of the ticket prices.

This model is more suited to wholesale and service industries.

We are looking at supporting more VAT models in a future update.

Happy to help - John (Easify Support)

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Posted by chazzer

Re: Purchase orders and VAT

John said:

No you don't need to change each product, just the VAT tweak box to reflect the amount of VAT your supplier is charging you.

Easify uses the ticket price VAT model to work out the VAT on an order.

This model is geared toward a retail environment where the gross total needs to add up to exactly what the individual ticket prices would add up to. Therefore the tax is calculated on the individual product.

The model you are thinking of calculates the VAT based on the subtotal (net total).

This is not a good VAT model to use in a retail environment as the Gross total won’t always equal the sum of the ticket prices.

This model is more suited to wholesale and service industries.

We are looking at supporting more VAT models in a future update.

Thanks for the reply, I'm not a numbers man as you can probably tell! but I will research it a bit more

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