Purchases where the VAT invoice has not arrived yet

Summary

Sometimes you pay for something and do not get a VAT invoice. A trade-counter till receipt, an online marketplace order, a card payment with a confirmation email. The money has gone, so the purchase belongs in your books now, but you cannot reclaim the VAT until the supplier’s VAT invoice is on file.

Torqueflow records the purchase straight away and marks it Awaiting VAT invoice. It goes on a chase list. When the invoice turns up you attach it, and the reclaim lands in the period the evidence arrived.

Prerequisites

• Your VAT scheme set up. See VAT schemes and settings.
• The finance.purchases.vat_evidence_manage capability to attach evidence or close a purchase out. See Roles and permissions.

The three states

A purchase is in one of three states, and ordinary purchases with a proper invoice show none of this.

1. Awaiting VAT invoice. The VAT is not reclaimable yet. It is on the chase list.
2. VAT invoice on file. The reclaim runs from the date the evidence was received.
3. Closed out. The chase concluded without an invoice, so the VAT was knowingly given up.

Steps

Record the purchase without the invoice

1. Scan or enter the receipt as usual, with the document type set for a non-VAT receipt.
2. Enter the document date. It is required, because the cost belongs in the period the money left the bank.
3. Confirm. The purchase is recorded and flagged as awaiting its VAT invoice.

If there is already an open purchase awaiting a VAT invoice for the same amount, or one naming the same order number, Torqueflow warns you before you create a second. Tick to confirm it really is a separate purchase.

Work the chase list

Purchases > VAT evidence lists everything waiting. The columns tell you what to do.

1. Channel and Order reference say where it came from and what to quote.
2. VAT at stake is what you stand to lose. It is either exact, the figure the receipt declared, or estimated from your standard rate. The two totals are kept separate, because one is measured and one is a guess.
3. Reclaim lands in shows which period it will fall into once the evidence arrives.
4. Chased is a dated stamp you set with Mark chased, so nothing looks forgotten later.

Rows are labelled Chase the seller or Fetch from marketplace. That is a label and a sort order, not a separate list. Fetching an invoice off a marketplace account is a different job from ringing a supplier, and the label tells you which.

Attach the invoice when it arrives

There are two ways, and they are not equivalent.

1. From the scanned document. Scan the VAT invoice in. If it matches an open purchase, a banner offers to attach it, saying whether it matched on the order number or just on the total. This is the one that files the paperwork, because the document is stored against the purchase.
2. By hand from the chase list. Key in the supplier’s invoice number, the date, the net, the VAT and the total. Quicker, but it does not store a document, and the form says so.

A candidate is offered, never chosen for you. You confirm it.

Fill in the figures

1. Net plus VAT must equal the invoice total.
2. Evidence received is the date the invoice reached you. It cannot be before the purchase date or in the future.
3. If the receipt declared a VAT figure and the invoice disagrees, both are recorded and you confirm which is right.
4. If the invoice total is more than what you paid, you are asked whether the difference was discharged without payment, a coupon, a discount or a write-off, or is still owed. A discharge needs a reason.

When it saves, the recorded cost moves to the invoice figures and the reclaim lands in the period the evidence was received.

Close one out when nothing is coming

Use this when the chase has concluded: the seller is not VAT registered, has refused, or has gone quiet.

1. Select No invoice will come.
2. Say why, in at least a few words. It is recorded on the purchase so it never looks like an oversight later.
3. Confirm.

You are told exactly what you are giving up, and whether that figure is exact or estimated. The cost itself does not move. It stays in the period the money left the bank. Only the reclaim is given up.

If the invoice turns up later, you can reopen it.

Expected Outcome

• Purchases in your books on the day the money left, not weeks later when the paperwork catches up.
• A worked list of what you are still owed in VAT invoices, with dated chase stamps.
• Reclaims landing in the period the evidence arrived, with the document on file behind them.

Notes

• The reclaim date is the evidence date, not the invoice date. This changes which quarter a reclaim appears in, on both accrual and cash. There is no period lock, so attaching evidence can change a quarter you have already filed. Check before you attach something old.
• Attaching can move a purchase to a different supplier, if the invoice turns out to be from someone else. It is confirmed by you, and it is not a merge. The VAT number on the invoice has to match the one already on file for that supplier.
• A scanned invoice can only be the evidence for one purchase.
• A voided purchase cannot take evidence, and a scan already filed against a voided purchase stays held against it.

Troubleshooting

Problem: Why does this purchase show a VAT-evidence panel and that one does not? Cause: The panel only appears when something is outstanding. Fix: Nothing to fix. An ordinary purchase with its invoice shows nothing because there is nothing to show.

Problem: Why did it pick that purchase as the match? Cause: It matched on the order number, or failing that, on the total. The banner says which. Fix: If it is wrong, tick to say it is a different purchase and record it as new.

Problem: “Net plus VAT must equal the invoice total.” Cause: One of the three figures is mis-keyed, often a misread digit. Fix: Check all three against the paper.

Problem: The VAT number would not save against the supplier. Cause: Either another supplier record already holds it, the format was not recognised, or your jurisdiction has no format to check against. Fix: The invoice itself was still attached. Add or correct the number on the supplier record. See Supplier management.

Problem: “A credit note refers to this purchase.” Cause: Its amounts cannot change while a credit note points at it. Fix: Resolve the credit note first.

Problem: I closed one out and the invoice arrived the next day. Cause: It happens. Fix: Reopen it and attach the invoice.