Reconciliation of invoices with the supplier uploaded invoices on GST system, ensure that the ITC which you intend to claim is accurate and meets all the provisions of the GST Act and rules. This activity, is more critical now, as the date of annual return filing on June 30th, 2019 draws closer.
It is important to compare invoices, which itself could run into large numbers, and identify the matches and differences. It is also necessary that the differences itself are analysed so that the corrective actions can be taken.
Keeping this in view, IRIS Sapphire, an end-to-end GST Compliance solution, is powered with reports to help you reconcile your invoices and ITC claim.
Here is a brief overview of such reports
Indicative availability of ITC
Once you review the differences in the invoice, you may want to categorise the invoices where you want to proceed with supplier data or your purchase details are proper ones. IRIS Sapphire provides summaries which are before taking any action and after you have reviewed the invoices and identified its treatment.
In the summary, along with the invoice counts you can also get a view of tax amounts after you have accepted and rejected invoices. This will allow you to assess the ITC available for you to claim based on the invoices accepted.
ITC on invoices which are booked earlier
In a normal scenario, the supplier uploads the invoice after effecting the supply transaction. When the goods or services are received, the receiver books the purchase transaction. Subsequent to this, the ITC accounting happens.
The supplier reports the sales transactions in GSTR 1. These comes auto-drafted to the receiver in their 2A. Ideally the 2A should match with reciever’s purchase data. But many a times, the invoices are booked by the receiver (hence present in purchase data ) but the corresponding invoices are uploaded by the supplier later (absent in 2A) due to reasons such as late filing or non-compliance.
Government analyses the auto-drafted details and send notices to taxpayers for explaining the differences, especially excess claim of ITC.
IRIS sapphire gives you a summary report on ITC on invoices where purchaser filing period is earlier than the supplier filing period.
ITC on invoices uploading in different FYs
The GST annual return requires providing details about the ITC claimed in the FY 17-18 for which the invoice is uploaded in FY 18-19. It implies invoices belonging to current FY have been uploaded by the supplier in next FY.
This report provides list of all such invoices where FY (as per invoice date) is different from the FY in which it is uploaded.
Analysing and minimising the missing invoices
For an entity having more than one GSTINs, it is important to get a view at the entity as whole to identify the cases of cross-referencing of GSTINs within your Business Group. The detailed analysis on missing invoices will help to identify the scenarios where the vendors have raised invoices to some different GSTIN, but within your PAN. There will be two reports
a. Consolidated view on missing invoices i.e. Supplier only (present in only supplier data) and Purchaser Only(present only in purchase data) for the FY
b. Comparable invoices from the missing invoices category across FY
Smart reconciliation and insightful reports are the handy tools which will help the taxpayers to perform reconciliation on a continuous basis as well as make them future-proof for the Annual Return and the proposed GST Simplified Returns.
In addition to Smart Reconciliation, IRIS Sapphire is now equipped with Advance Reconciliation which removes match anamoly across financial years, apply fuzzy logic and match invoices beyond invoice numbers.
IRIS Business is a leading GST Suvidha Provider (GSP) providing easy and efficient solutions for GST (IRIS Sapphire) and E-way bill (IRIS Topaz) compliance. With Smart Reconciliation Logic and facility to share your invoices with your vendors and distributors, IRIS Sapphire will surely make the invoice matching and reconciliation easier for you. For a demo or to know further details please write to firstname.lastname@example.org.