Switching to Itemised VAT

Owned by Ruth Mills
Last updated: Jul 30, 2024
3 min read

Introduction

Historically, if manually entering an invoice in IndiCater you would add the different net amounts for the different purchasing categories and one VAT and one gross amount.

Since then, many clients have switched to use Itemised VAT, which means the users enter the VAT for each different category. EDI invoices all use Itemised VAT as standard, meaning that we store a VAT amount and rate for each item within an invoice or credit note.

Itemised VAT leads to more accurate reporting and enables the exporting of the accurate VAT amounts for each nominal in the purchase invoice export which is uploaded to your accounting application.

All new clients have been set up this way since we developed the Itemised VAT option back in 2019. We are now wanting to move all clients to Itemised VAT.


What does this mean for the users?

There are 3 places where this will impact the user journey.

  1. Manually adding invoices and credit notes

  2. Manually converting estimates into invoices and credit notes

  3. Manually combining estimates

 

In this guide we will go through these 3 user journeys.

 

Adding invoices and credit notes

When entering an invoice, users are asked to enter the net of the different categories and a single VAT amount:

 

image-20240311-142933.png

 

With the Itemised VAT option, users will need to enter the VAT rate (0% or 20% which can be named as Zero and Standard, this is a decision you can make) for each category they have added:

image-20240311-143022.png

 

Converting an estimate into an invoice or credit note

When converting an estimate into an invoice or credit note, users will be required to enter a VAT rate and amount for each line. If they are ordering through IndiCater, the page will look like the below which each line being an item purchased.

They can set the rate at the top and have it apply to all lines and amend it where required or set it line by line:

 

If they are manually adding estimates, it will look like the below:

 

 

Combining estimates into an Invoice/Credit Note

When combining multiple estimates into an invoice

Click on the estimates you wish to combine and see that the VAT amount becomes editable:

 

Click on the 0.00 in the VAT column to enter the VAT for the relevant lines in each estimate

 

You can use the drop down in the header row to set the VAT rate for all lines or change them line by line using the drop down list in each row. When finished click OK.

Enter the invoice number as normal and click Save

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