I am compelled to write on what I term the gross misuse of source accounting documents by some small and medium Enterprises (SMEs).
It pains me to go in a business entity, make a cash purchase and the accounting source document you are given as proof of the purchase, is a document called tax invoice with a paid stamp on it.
This trend is common among businesses especially in the supply business. Sometimes I wonder if these businesses do engage well trained accountants who should be able to advise management the proper usage of accounting source documents such as a tax invoice.
Honestly speaking how can a tax invoice bear two names at the same time? On the far corner it is written a tax invoice while at the other end it bears a receipt name.
Although the Zambia Revenue Authority (ZRA) administration of value added tax (VAT) entails that its determination is based on the tax invoices especially to the supplying businesses, it has not changed the meaning of the definition of an invoice.
I say so because these problems of misuse of source documents are emanating from the misunderstanding of the use of the tax invoice as demanded by ZRA.
Let the entrepreneurs know that the description of an invoice remains the same whether it is disguised as a tax invoice by ZRA or not.
An invoice is a source accounting document that is issued by the supplier to a customer who obtains goods or services on credit and promises to settle a payment at a later date.
Therefore it is not in order for a supplier to issue an invoice to a customer who makes a prompt cash payment.
However in this article I want to trace why some suppliers are issuing tax invoices in place of a receipt because a source document which is issued for prompt payments, is a receipt.
This is so because VAT is driven by invoices and its calculation is based on the issuance and retention of tax invoices when calculating it.
Therefore the law requires the retention of tax invoices and other tax records for the period of not less than six years from the time they are issued.
The tax invoice is an invoice which is designed by the tax office to suite its requirement for the benefit of collecting VAT by the Government and is enforced through the law.
The rate of collecting VAT in Zambia is 16 percent. Registered suppliers for VAT purposes are required by law to issue tax invoices to their customers, but this mostly applies to non-retail suppliers in this country.
A tax invoice has certain requirements on its face required by the tax office. The following are the tax invoice requirements demanded by the tax office on the face of a tax invoice:
1. The word tax invoice must be on the face.However even the issuance of tax invoices by the businesses who are non-retailers is backed by the VAT law, the tax office has not replaced the receipt with the tax invoice.
2. The name and address must be on the face
3. The VAT registration number has been replaced by the tax payers identification number (TPIN) on the face.
4. The serial number of the invoice and the date of issue, a must.
5. The quantity or volume of goods or services supplied.
6. Description of the goods or services supplied.
7. The selling price excluding the VAT and any discount allowed.
8. The total amount of VAT charged.
9. The total amount of VAT inclusive.
Instead, as a matter of prudent accounting and practiced by accountants who know the implication of the invoice and a receipt in the books of accounts, will issue a tax invoice immediately followed by the receipt for the purpose of fulfilling of the VAT law.
The advice given to businesses that are issuing tax invoices to the customers who make prompt cash purchase to customers in order to fulfill the VAT law is that immediately they issue a tax invoice should issue cash purchase receipts to cancel the invoice.
Still claiming your expenses via spreadsheets, outdated legacy or in house system. Is it time to look back on the traditional ways with nostalgia, as here are the top 10 reasons why expense management needs to be automated in the right way and you don’t have to be a big organization as the benefits are hard to ignore.
Saving your money in more than 1 way: Many business organizations fear of being trapped and continuing with their current system, as the organizations these days are more worried about the cost to change. The implementation of these pricing models are based on the usage could be done quickly and easily in such a way that it is no more a burden to the IT organizations. The ability to link your expenses with the credit tool and import data into the expense management software tool would mean that the data has been prepopulated in the claim. This would again help you reduce the cost of all the claims with 78% per transaction. This would also mean that the data credited into this software tool is in one place and the report is all set to go on, giving you the insights of where you have been spending money and would help you negotiate the discounts with all your regular suppliers.
Keeping your enterprise in order: Being aware of all the new rules and regulations and managing all the related changes to related is considered to be time consuming and costly. And to a large co - operations when you have your business operating in different countries the challenges continue to grow and turn out to be complicated. Expense management software system to this would eliminate all the risks around the regulatory compliances, where they could easily apply for the complex tax rules providing in built auditing capabilities capturing the data required reporting the expenses spent for cooperation and income tax purposes.
Checking where your money goes: Having decisions made without a relevant data is not an easy job. Having travel and expense information that is centralized would make it simple and easy to report on a multitude of the performance indicators. This insight is important for the ongoing refinement of travel and the business expenses, identifying the areas of where the best deals could be negotiated with the suppliers. This would also help you identify the trends by the mode of transport, through clients, employee or the organization minimizing the fraud and regulation breach.
Minimizing the fraud: Accuracy is the most important key to an efficient system that would help you decreasing the fraud. The solutions here ensure that fair and consistent rules could be applied across the entire company, ensuring that the employees do not have the right opportunity to enter into the incorrect and out of policy claims.
Flexible and Scalable: The expense management software makes the entire process easy to manage, having a low risk and minimal implementation project costs that could be recovered quickly through cost savings and greater efficiencies. And we are all living in an economy where the companies could buy other companies, merge and expand their business into different territories and regions. This entire system is scalable to support the business growth where the solutions could be easily rolled out into countries and whenever required would support the external regulations, local currencies and VAT and per diem rates.
Indira Moola, Marketing Operations Manager at Expenzing, focused on growing expenses management software India product and communicates the value of identity to customers, partners, and the larger community by targeting specific markets through segmentation and analysis.
Well,this is probably because Small businesses have difficulty raising capital - that's no secret. But Leasing equipment may be a better option for your business's equipment financing.
Equipment leasing is simply a process by which you obtain the use of a certain asset like a car, computer or software solution for which you don’t pay the full purchase price but instead you only pay a series of contractual, periodic payments while you use the equipment.
If you are worrying about how realistic your plans are (or if colleagues and friends have raised doubts), here is my take on the advantage of leasing computer equipment.
Technology will always change while on the other hand, not every jim and Jack has a budget readily available for these changes that is why a growing number of companies in this credit-tight economy are looking at leasing as a smart option that is accompanied by little risk.
Secondly, obtaining finance you need to purchase equipment is not easy, particularly where technology is concerned. Banks are more risk conscious than ever before, preferring safer investments of their funds such as real estate and more tangible assets.
For this reason many companies are finding it increasingly more difficult to obtain financing through overdrafts and loans.
I have often used this quotation on this blog and I will use it again, “Eneke the bird says that since men have learned to shoot without missing, he has learned to fly without perching” This Igbo proverb means People adapt to other people's learnings, particularly when the other person's learnings would harm you if you kept on your present course. In other words external factors can have effects on people so much that they change.
Leasing is the single largest form of external corporate finance in the world. In case you didn’t know, over 80% of companies – from small, start up to multinational companies at least lease one asset or the other.
I know that probably there may be very few leasing companies in your area but it is just a matter of time, remember what I said “people adapt to other peoples learnings”
If you are still worrying about how realistic online tax filing is (or if colleagues and friends have raised fears about online tax filing) here is my take on it.
First, you only need to understand these step-by-step instructions on filing of your e-return using ZRA Online Tax to help you save time.
Secondly, bear in mind that you will need a computer with internet connectivity to successfully file return online. There are six steps to file e-returns. These Steps are:
1. Log into the portal
2. Download e-return form/s
3. Filling the details in the form/s
4. Validate the form/s
5. Uploading the form/s
6. Obtaining Acknowledgement Receipt
Thirdly, download this detailed Tax payer user guide for e-return filing to help you understand more about these steps for online tax filing. The guide has specifically been designed to give you a step-by-step guidance to online tax filling.
If you are still on the fence about joining the millions of taxpayers using ZRA Tax online facility to e-file their returns, here are some of the advantages.
File your return from anywhere.Filling your tax returns online will not only save you time and money but will also give you the convenience of filling your taxes in the comfort of your home away from noise, the queues and traffic jam.
Save money.There are millions of tax payers in the country spending valuable hours in queues at ZRA offices every day, burning fuel in their cars and enduring the hassle of the traffic in town. You can save money if you choose to e-file your returns using Online Tax.
There are many benefits and advantages of filing your tax returns online with ZRA Online tax. With these benefits in mind, you might want to consider switching to online tax filing.
Basically the Epos system is concerned about support of the data entry procedure by means of different devices like keyboards, touch screen monitors and scanners. All of these are prone to faults and malfunctioning and if this occurs it can hurt your point of sale transactions for hours until fixed.
There are many ways to keep your Epos system working efficiently and without any fault. Some common ways of keeping the Epos system run smoothly are as follows:
UpdateEpos software regularly
Epos companies keep on working on fixing bugs and their new versions gets better stability and performances. Hence, make sure that you are updating your Epos software whenever a new version is available. Just set the notification on for any new version availability. Additionally, you can subscribe to the newsletter of your Epos vendor. Most of the Epos vendors communicate any new version availability or major release through their newsletters.
Have best supported accessories
Another way of ensuring the effective working of the Epos system is using the best supported accessories. If possible buy all the accessories from the same vendor from where you have bought your Epos system. Moreover, use multi-line bar code scanners. This ensures the pricing is kept accurate and honest working of system. Consequently the cashiers are allowed to work efficiently and quickly.
Have an updated antivirus
Computer systems are prone to get affected by viruses and malwares. Do not take a risk and always have an updated version of any good Antivirus installed in your system. There are some free antiviruses are available in the market, the best bet, buy a full version of any leading Antivirus software for a full protection.
Train your employees
Today’s Epos systems are so sophisticated that it doesn’t need proper training to use it. However, a complete picture of its functionality and a formal training to your employees can help you avoid some pitfalls that can arise due to mishandling. Generally all the Epos vendors provide free training to Epos users. Make use of that and schedule a training session and gather all your employees to attend the same.
Subscribe for support of your Epos provider
Generally Epos vendors provide free after sales support for a limited period of time and charge additionally for an extended period. It is always wise to subscribe for their support to ensure that you get immediate attention and remedy when your Epos system starts malfunctioning. It is better to be ready than losing business for hours in case of any failure.
In short,a well working and an updated Epos system is essential for keeping the sales system up to the mark. These precautions and activities help you to avoid a system failure that can hurt your business for hours. This will also be helpful in order to remove the manual flaws from the pricing system.
About the Author
Julie Evans is an EPOS expert and currently serves as the head of marketing at Epos Direct. For more than 16 years, she has researched and analysed the requirements of a wide range of business formats to develop EPOS software that satisfies their unique requirements.