When you receive an invoice for a service or good that you made use of, it may happen that the invoice lists several items with different tax rates. Here is a typical example: hotel bills. In this case, the overnight stay will be disclosed with a VAT of 7 %, the breakfast, however, will be calculated with a 19% rate.
Up to now, when registering the expenses within Billomat, it was not possible, or only throughout a complicated workaround, to separate the different line items on the purchase invoice by tax rates in order to correctly disclose the input tax for the turnover tax advance return.
However, purchase invoices with different tax rates are not that uncommon. But also for other application scenarios, it may make sense to merge individual invoice items into one line item, for example, in order to differentiate between products and services that you made use of, or in order to group the invoice items by expense accounts or cost centers.
How to create line items in purchase invoices: Different tax rates
As already announced, the Billomat software will be extended by the long-desired turnover tax advance return in the first quarter of 2019. In order to correctly display the input tax for the turnover tax advance return, you can now merge individual or several invoice items into the so-called line items. To do so, use the plus symbol “Add line item” in the input mask of the purchase invoice.
When the VAT is stated in the purchase invoice, it is also relevant in which country your business partner is active. But do not worry, Billomat supports you in this task! Based on your business partner’s contact data, you will automatically see the correct input mask.
#1 Purchase invoice from Germany
Let’s assume, you were on a business meeting in Frankfurt and you stayed there over night. Afterwards, the hotel issues an invoice for the overnight stay (7 %) plus the breakfast (19 %). In order to register the travel costs as expenses in your Billomat account, you create a purchase invoice. As usual, you can upload the hotel bill through the mobile document scan, via email or via the file upload. In order to correctly register the input tax, you can add another line item through the plus symbol, which will separate your items overnight stay (7 %) and breakfast (19 %). Underneath the form, the total net amount, the due taxes and the total gross amount will be summarized.
#2 Purchase invoice from other European countries
If your business meeting did not take place in Frankfurt, but in some other EU country, for example, in Lisbon, the so called reverse charge mechanism applies. In this case, the supplying company is not allowed to disclose the VAT separately. Billomat supports you in the proper registering of purchase invoices from foreign EU countries. This means, provided the supplier is located in another European country, you can register the EU reverse charge rate (0 %, 7 % or 19 %) for each line item in the dropdown menu. However, the individual invoice line items as well as the total amount are always disclosed without VAT. In addition, you can define for each line item, whether it is a service or a product. However, you cannot specify a tax rate, given that the input tax deduction is not taken into consideration during the turnover tax advance return. Learn more about it
#3 Purchase invoice from third countries
In general, the reverse charge procedure only applies to business operations within the EU. However, some third countries outside the EU have also associated with the regulations of the procedure on the basis of intergovernmental agreements, such as Switzerland. In our case, this means: for your business trip to Berne in Switzerland, the hotel will issue a bill for the overnight stay and the breakfast. The due VAT will not be disclosed on the hotel bill. When registering the travelling expenses as a purchase invoice in your Billomat account, the software recognizes on the basis of the supplier data that the company is located in a third country. As a result, you can create a line item for some of the items on the invoice, though you can neither specify a tax rate for them nor will the tax be disclosed on the purchase invoice.
Line items in purchase invoices: further application cases
The grouping of several invoice items with identical tax rates within a purchase invoice is only one possible application case. The creation of line items in purchase invoices can be useful when grouping several invoice items according to the following aspects:
- type of article: service or product
- expense accounts: e.g. office supplies and raw materials
- expense accounts: e.g. material and manufacture
- categories: e.g. hardware and software
Please note: It is not necessary to group all the invoice items into line items one by one. The creation of line items is only intended to summarize several invoice items into groups, or to group them by tax rates or article types.
What else is new?
Along the new option to summarize several items within a purchase invoice using line items, we proceeded to additional improvements to the form and the workflow for the registration of expenses, amongst which:
- Preview: When uploading a document into the purchase invoice, whether it is through the inbox or the file upload, the document will be shown directly next to the form as a preview. This will make it easier in the future to register and check the recorded amounts.
- Gross/Net amount (purchase invoice from Germany): When registering one or several line items in the purchase invoice, you can define throughout the controller | incl., whether the recorded amount is a gross or net amount. The advantage of this is that the VAT is registered correctly in the system, no matter with which amount you are working.
- Display of the form: We optimized the form, so that you can use it fast and easily on every terminal device and without scrolling. Register also the cost center, the expense account as well as the cost type, so that all the data for the turnover tax advance return, the cash flow statement and the DATEV export are complete.
- Product vs. Service (purchase invoice from EU foreign countries): Above all, in the case of invoices from EU foreign countries it is important to distinguish between products and services. The corresponding symbols appear in the form as soon as the supplier is located in the EU foreign country. In case the registered purchase invoice consists of products as well as services, you can register them in two different line items. During the update, the Billomat API, the DATEV export as well as the CSV import/export have been adapted, so that the tax rates can be taken into consideration correctly. Our API is downward compatible, thus an adaptation of the existing interfaces is not necessary.
Purchase invoice: What happens next?
Optimization of the automatic text recognition
When you upload a receipt or use a document from the inbox, the automatic Billomat text recognition extracts the address details, invoice number and amounts from the document and transmits them to the input mask. This way, you can register purchase invoices fast and error-free. The registration of the total gross or net amount already works really well, however, the text recognition weakens slightly at the disclosure of different tax rates. For this matter, we will publish an update shortly which automatically shows different tax rates – provided that there are different ones. If no tax rate can be registered, the total gross amount will be applied with the tax rate of 0 %.
Automatic assignment of expense accounts
Through the account settings > Configuration > Accounting you already have the possibility to define the default account system for your Billomat account. Based on this information, Billomat will soon propose you the adequate expense account for the registered items when creating the purchase invoice, in order to optimize even more your workflow.
Feedback, questions or help?
Do you still have questions about the latest purchase invoice update or do you need help with the configuration of the account systems? Our customer support is at your disposal at any time, either by email: email@example.com.
Overview of the latest Billomat updates:
- GoBD update: Completed documents cannot be deleted (29.10.2018)
- At a glance: Billomat changelog 3rd quarter of 2018