The bill/credit note maintenance transaction allows you to record a bill or credit note received from a supplier. Subsequently, paying a bill is done through the Pay Bills screen.
Indicate the type of transaction that you are entering by selecting either bill or credit. Select bill when you wish to record the details of a bill you have received from a supplier. Select credit when you wish to record the details of a credit note you have received from a supplier.
The supplier list contains all active suppliers associated with the business.
Auto-complete field names
Rather than a drop-down to select from a list, simply start typing and the system will identify any occurrences of the combination of characters entered and you select from that shorter list. As an example, type 'able' and the system will offer:
Adding new customers / suppliers
If the combination of characters you enter does not provide any results, press tab and the system will know you need to add the customer/supplier and ask you to confirm the details. At this point add address, email contact etc if required.
The trading terms represent the number of days by which settlement of an invoice or bill is due. The trading terms for a customer or supplier can be specified via the appropriate maintenance transaction, but can be overriden on documents if required.
When raising an invoice an additional payment terms option "Paid In Full" is available. When this option is selected an additional drop-down appears which allows you to select a bank account. If a bank account is selected the receipt will be recorded and the invoice closed.
Enter any reference to be associated with the transaction.
If a document storage option has been selected on the optional features tab of the Organisation profile then a symbol is visible.
- Link to external document storage
- indicated by or if a link has already been created. Click to view document, edit or delete the link.
- Attachment for internal document storage
- indicated by or if a document is already attached. Click to view or delete.
The line items that make up the bill or credit note value now need to be added. A line item is a value posted to an expense account extended by the VAT if appropriate.
ADD ITEM button accesses the line item input. Select the Item from the drop-down. Default values for VAT Rate (If VAT registered) are displayed. These defaults may be overridden. Enter any Additional Item Text (This will be printed on the Bill) The system will extend the values and summarises them.
SAVE ITEM button saves that line item in the screen. Clicking ADD ITEM button on each occasion allows user to enter further line items. UNDO ITEM cancels the current line item data.
The amount is the total of the items associated with this bill/credit note.
Purchase File Ref.
When a purchase type transaction is recorded by clicking the button a unique purchase file reference number is given to the transaction. This is in addition to the normal sequence number series that allocates an unique number to each transaction and is part of the audit trail.
The purchase file reference number starts from 1 and increments for each subsequent purchase transaction as it is entered regardless of the transaction date applied. The number can be used to write on the original document as an easy reference (rather than by transaction date) before physically filing.
The purchase filing reference number is assigned and shown in the confirmation dialogue when the transaction is submitted; up until that point "TBA" is displayed representing "To Be Assigned".
The purchase filing reference is displayed if the transaction is subsequently viewed or edited and can be used in the Find Transaction search facility at the top of the LISTS menu for easily locating a document.
Note, that not only is a Bill transaction given a Purchase Filing Reference so to is the subsequent payment transaction, as this may cover multiple payments or be a part payment. Also if a transaction is deleted the purchase filing reference number will also in effect be deleted and could result in a gap in the series.
The account drop down list is used to associate the line item of a transaction with an account from the chart of accounts.
- If nothing is displayed either
- simply start typing an account name or ledger code and the system will provide a list of potential selections; choose the required account by clicking on it.
- or click the icon
- to display a list of document-type sensitive account possibilities. Note to change to other account-type options click the small down arrow at the base of the screen
- If an account is displayed
- In many instances once a third party (customer, supplier or employee etc) has been selected the account box will display a default learned account. For other associated learned accounts click the icon. Note to change to other account-type options click the small down arrow at the base of the screen
By default the list of accounts offered for selection are Expense accounts however other accounts can be valid such as Prepayments and Accrued Income or Accruals and Deferred Income where prepayment schedules are being used.
The net amount associated with the item.
When recording purchases, if you have a gross amount and want liberty to calculate the net amount and vat amount simply enter the gross amount in this field, select the appropriate VAT code, and type "g" in the VAT amount field.
The appropriate VAT rate for the account must be selected. Default VAT rates can be associated with an account via the Account Maintenance screen which is available from the chart of accounts view.
If the business is on the HMRC Flat Rate VAT Scheme, as defined on the VAT details tab of the Business Profile, the VAT rate will default to "Out of Scope" for all purchase transactions. This can be changed if necessary. Exceptions may apply for purchases of capital assets of significant value, please consult your professional advisor.
Current VAT Rates
20.0%, 5% & Zero, used for normal UK VAT transactions.
Used when a transaction is an exempt supply; such as the purchase of insurance. See the VAT Guide (Notice 700) for more details or visit the Revenue and Customs site at www.hmrc.gov.uk
Ended 31/12/2020 except for Northern Ireland - EU Acquisition
Used when you purchase goods from a VAT registered supplier in an EU member state. Make sure that the VAT code is set to EU Acquisition, and that the VAT amount shows the VAT which would have applied if the purchase had taken place in the UK. The correct country must be set on the supplier record to ensure correct reporting of the transaction.
No longer in use , kept for historical record only - EU VAT
Only used if you have you have incurred VAT in an EU member state, (i.e. local VAT). This CANNOT be recovered as input tax for UK VAT. You may make a claim for refund from the member state. A scheme exists to do this known as "Refunds of VAT in the European Community for EC and non-EC businesses" The details are in notice 723, refer to the Revenue and Customs site at www.hmrc.gov.uk Use of this VAT code is described more fully in the "VAT and Liberty Accounts" user guide.
Out of Scope
Used when a transaction is not in the VAT system at all. For example payments into a money purchase pension scheme are out of scope because they are equivalent to savings. Recording a payment of VAT to HMRC is a common example where Out of Scope should be used, as are salary payments and repayments of director loans. Using this code will result in no VAT reporting impact.
This code is used where there is no VAT on a purchase transaction, typically from a supplier who is not vat registered. This is not the same as zero rated, exempt or out of scope. The impact is that the value of the purchase is included in box 7 of the VAT 100 return.
20% and 5% Domestic Reverse Charge (Used on Sales Invoices only)
Use either of these codes when a sales invoice is being raised that is subject to domestic reverse charge VAT. This has the impact of not adding a VAT amount to the invoice total but annotates that domestic reverse charge applies.
Where domestic reverse charge apples to a customer (receiving a bill with domestic reverse charge notification) see the special note below.
This code can be used where there the transaction is recording an aggregation of mixed VAT codes in a single entry with the VAT amount manually set as required.
Import VAT (Used on Purchases only)
This code is used if the organisation buys goods from outside of the UK for use in the business then it may use a system called postponed VAT that allows it to account for VAT on the VAT 100 return rather than paying VAT immediately at the point of entry. This is a potentially complex area and so we strongly advise you consult with your advisor.
Special Note - Reverse Charge VAT
Reverse Charge VAT
Reverse Charge Procedure (for services from foreign suppliers)
If you are a VAT registered business in the UK and receive services from suppliers in other countries you may have to account for VAT to HMRC. This is known as reverse charge. The system provides a procedure for dealing with this.
Enter the transaction normally and select an appropriate Standard Reverse Charge VAT rate that would apply if the purchase had taken place from a UK supplier. The appropriate entries are made to the VAT100 report and any VAT transaction reports.
The system impact is to add to the VAT control account an amount of output tax (as if a sale) calculated on the full value of the supply received, at the same time add (subject to the normal rules for deduction of input tax) the same amount of VAT as input tax to the VAT control account. The net impact on VAT is zero; additionally the VAT100 return also displays sales and purchase values in the appropriate boxes.
Domestic Reverse Charge
Domestic reverse charge is essentially an anti-fraud measure and applies to a range of goods and services transacted between UK VAT registered suppliers and customers and includes:-
- Mobile Phones
- Computer Chips
- Wholesale Gas, Electricity and Telecommunications
- Emission allowances and renewable energy certificates
- Building and construction services, both buying and selling (from 1 March 2021)
For customer receiving a bill subject to domestic reverse charge
Enter the bill or payment in the normal way select an appropriate Domestic Reverse Charge VAT rate that would normally apply as notified on the bill. The appropriate entries are made to the VAT100 report and any VAT transaction reports.
The system impact is to add to the VAT control account an amount of output tax (as if a sale) calculated on the full value of the supply received, at the same time add (subject to the normal rules for deduction of input tax) the same amount of VAT as input tax to the VAT control account. The net impact on VAT is zero; additionally the VAT100 return also displays sales values in the appropriate box.
Note that the system distinguishes between domestic and non domestic reverse charge by the country stored on the supplier record.
The amount of VAT charged on this item is automatically calculated based on the vat code selected but can be changed.
When recording purchases, if you have a gross amount and want liberty to calculate the net amount and vat amount simply enter the gross amount in the net amount field, select the appropriate VAT code, and type "g" in the VAT amount field.
Charge to Customer
Associate an item with a specific customer if the item is classed as a reimbursable expense.
Occasionally expenses are incurred by your business on behalf of a customer to whom you will invoice the expense to recover it. By selecting to relate an expense in this transaction to a customer, a report can be produced that lists all reimbursable expenses that have been recorded. You may use this report to ensure that you have invoiced all those expenses to the appropriate customer.
The report is found under the Reports Menu.
Reports - Customers - Reimbursable expenses
Note that the option to do this is set the the organisation level by ticking the Tracking Rechargable Expenses on the organisation Profile. If the option is not selected, no customer selection drop-down is offered. To switch on navigate to the Organisational Profile.
Control - Organisational Profile - Optional Features
To record the transaction click on the SUBMIT button.
Once a bill has been created and stored, a user Opening the transaction will see , just below the header area, an action box symbol. This provides quick access to: -
- Print Remittance Advice
- Once the bill has been paid this action appears to allow for a pdf remittance advice to be created for printing and subsequent emailing
- Memorise and Schedule
to open a screen to set up a memorised or scheduled transaction based upon this transaction. More information is available from this Memorised Transactions link.
to open a transaction audit report that provides a non-editable history of the transaction and its accounting impact. The report details which user recorded the initial transaction together with the date and time as well as the details of any subsequent amendments.
- to remove the invoice. Note if a payment has been allocated to the bill or it has been included in a filed VAT return the delete option will not be available.