South Africa Customisations Documentation

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Easy VAT Addition in Bank Reconciliation Tool ​

This feature enhances the Bank Reconciliation Tool to simplify the process of accounting for Value-Added Tax (VAT) when creating Journal Entries for bank transactions. It allows for automatic calculation and posting of VAT, saving time and reducing manual errors.

Setup ​

To use this feature, you first need to configure the relevant expense accounts. For each Account that will be used for taxable transactions during bank reconciliation, you need to set default VAT details.

  1. Navigate to the Chart of Accounts.
  2. Select the expense account you want to configure (e.g., "Telephone Expenses").
  3. In the Account settings, locate the Bank Reconciliation section.
  4. Fill in the following fields:

Bank Recon settings on Account

  • Tax Account: Specify the VAT account to which the tax portion of the transaction should be posted (e.g., "VAT").
  • Tax Rate: Enter the applicable VAT percentage (e.g., 15 for 15%).
  • Cost Center for Tax Account (Optional): If the VAT portion of the Journal Entry needs to be allocated to a specific Cost Center, select it here.

Bank Reconciliation Process ​

Once the accounts are set up, the process in the Bank Reconciliation Tool is streamlined.

  1. Open the Bank Reconciliation Tool and load your bank transactions.

  2. For a given bank transaction, click on Create Voucher.

    Bank Reconciliation 1

  3. In the dialog, set the Document Type to Journal Entry. A Tax Details section will appear.

  4. Select the appropriate expense Account in the Second Account field.

    Bank Reconciliation 2

  5. Upon selecting the account, the system will automatically fetch the Tax Account, Tax Rate, and Cost Center for Tax Account from the values you configured on the expense account master.

When you create the Journal Entry, the system will automatically split the transaction amount. The main expense portion will be posted to the selected expense account, and the calculated VAT amount will be posted to the specified Tax Account, creating a three-line journal entry (Bank, Expense, and VAT). This ensures that VAT is correctly accounted for directly from the bank reconciliation screen.