Using the Transfer VAT Field

After you select the Transfer VAT check box, you must also:

• Set up the Transfer A/R VAT Tax Code and Transfer A/P VAT Tax Code on the Tax Systems form.
• Set up the A/R Account and A/P Account on the Tax Codes form.
• Set up the VAT A/R Received Account field and VAT A/P Paid Account on the Tax Codes form.

For A/R, after you reconcile a deposit on the Bank Reconciliations form, the system:

• Calculates the VAT amount to be transferred.
• Creates journal entries by debiting the A/R tax account with the calculated VAT amount and crediting the VAT A/R Received Account.
• Transfers the VAT amount from the A/R Tax Account to the VAT A/R Received Account.

For A/P, after you reconcile a payment on the Bank Reconciliations form, the system:

• Calculates the VAT amount to be transferred.
• Creates journal entries by crediting A/P Tax Account with the VAT amount and debiting the VAT A/P Paid Account.
• Transfers the VAT amount from the A/P Tax Account to the VAT A/P Paid Account.

The system automatically updates A/P payments during bank reconciliation. However, the system does not automatically update A/R deposits during bank reconciliation. Customer A/R deposits must be manually entered on the Bank Reconciliations form.

You will need to run the Bank Reconciliation - Compression Utility occasionally to purge transactions related to deposits.