As many businesses are gearing up for the GCC VAT activation on the 1st of January 2018, we help you decide whether you need to consider a new accounting software or upgrade your existing accounting software. From the 1st of January 2018, all transactions including Sales Invoices, Purchase Invoices and Cash Payments need to record the Tax Type on these documents. Firstly the question you need to ask is – ‘Are you using VAT compliant software?’
If you work here in the UAE, you may have heard/seen or attended training sessions, forums, discussion groups and webinars on the subject – UAE VAT. As for us at Al Roman Technologies, we get many calls nowadays asking for a VAT compliant accounting software because there are thousands of users of Sage 50 Accounting – US version (Previously known as Peachtree Pro/Premium/Quantum) & Quickbooks Accounting Software – US Version, which are not UAE VAT Compliant.
The main factors that help users to decide if their accounting or business software is not VAT compliant, are the following….
1.) The ability to record INPUT tax.
On your Purchases, you need to record an INPUT Tax (Purchase Tax). If businesses do not record the Tax type then they will not be able to submit the VAT report for verification. Moreover, the business will lose money if they only record OUTPUT Tax (Sales Invoices). Check if your software allows the input of Tax % at the time of a purchase transaction (procurement module) and Supplier’s Batch Invoice Transaction. Also, note if you are paying cash for various expenses then your Cash Book Transaction also need to record these tax types.
2.) The ability to report on Zero rated and exempted tax transactions.
The authorities will be stipulating VAT rates for different types of transactions depending on the type of product or services that you are offering or purchasing. Therefore it is important to consider when you file your VAT returns to the authorities, the user needs a report to show transactions and the rates that have been applied to the transactions.
3.) Saving Cost
If you are not recording these tax rates or unable to report on them, you would need to employee a VAT audit firm, to fill your tax returns, which may cost your business a good deal of money. Consider if you have to file these tax every quarter!
While we wait for the authorities to publish the different rates and exemptions, there are many businesses that are early adopters and getting ready for the VAT adoption. So don’t wait, call us today 04 3594459 or email firstname.lastname@example.org for a free consultation.
Al Roman Technologies LLC, established in 1992, providing accounting and business software to small/medium sized businesses throughout the middle east. Our software solutions cater to a large segment of the businesses community requiring not only Financial but also CRM, Inventory Management, Warehousing Management, Manufacturing, Job Costing, Payroll, Van Sales and Point of Sales software’s. Our solutions help small to medium businesses to optimize their business processes so they can realize their true potential, be it through, business Intelligence reporting or dashboard on the mobile app. Our Products include Sage 50, Sage 100 Evolution, Sage 200 Evolution, Sage 300 and Sage Pastel.
Next quarter, we talk about – ‘Does your sales invoices need to show product/service descriptions in Arabic?’