VAT & Stock level questions

[Nicolette]

I have spent a while searching this issue on here and it has led to additional questions...

Is it better to calculate the tax per item or on the entire order?

I understand that because the tax rate can change that this calculation is justifiably stored but that leads to my next question...

Is it better to store the decimal version of the rate or the calculated amount of the tax (which circles back to my first question)

Is it better to store a 0 starting inventory then do the figuring on the flow of inventory in and out?

I have a single user database.

 

[boblarson]

I would store the tax RATE in the order header and apply the tax to the entire order, if that is the way the retail world works where you do (it does here). If it is applied to each item then you would apply it to each item.

But I've seen your discussions and I would save the tax RATE and NOT the tax amount so that you can, give the auditors that information should they need it.

 

[gemma-the-husky]

well, you dont apply the VAT to the ORDER - you apply it to the invoice - which may certainly not be the same thing

now its probably a matter of taste whether you calculate the invoice total, and then calculate the VAT, or calculate it line by line - although you should bear in mind that the second method could lead to some rounding errors

i would definitely store the tax rate in an invoice - but i would also store the calculated tax as well - since
a) it cannot change and
b) it will be needed in the future

 

[Rabbie]

now its probably a matter of taste whether you calculate the invoice total, and then calculate the VAT, or calculate it line by line - although you should bear in mind that the second method could lead to some rounding errors

HMRC rules allow either method of calculating the VAT. As Gemma says the two methods may give sligtly different values but rarely anything of significance

 

[PNGBill]

Just be careful that in the future different items are not taxed differently.
We have that here in Papua New Guinea and also in Australia.
In this case, you do need the tax rate to be held by a product or if not, then a product group if such exists.
In this scenario you could hold the Tax rate by OrderDetail/InvoiceDetail, if different and the TaxAmount by OrderHeader/InvoiceHeader.

I think you just have one table and a field to show if Invoice or Order, if so, then detail table would store the Rate and header table store the $amount.

The system really won't notice the "extra work" now but you will notice it if a new government starts putting different tax on different items and you get zero notice

 

[GaryPanic]

if you are UK based Tax man allows rounding differencs as long as they are not excessive

 

[Nicolette]

thanks for all the input.... how about the inventory flow question.... What are your thoughts on that?

 

[PNGBill]

thanks for all the input.... how about the inventory flow question.... What are your thoughts on that?

Calculate the inventory - just as you do for Invoice Total.

Stocktakes and year end stock figures just use queries that less then or equal to the date to 31st Dec 2009 eg.

Any difference at Stocktake time is taken up as a Sale but charged to Shrinkage so that on the next day, your stock balances and your records show 10 items lost. This can be handled by a form when you get to it.

To have a field, StockOnHand and add or minus as goods in and goods out is worse then just simply summing purchases less sales.

You would have to do a purchase document for your Stock on Hand on day one. Until then, I guess you have negative stock as you sell items.