In certain situations, when entering a purchase invoice from a vendor in Business Central, the amount may not match the total shown on the vendor’s invoice. This can happen due to differences in rounding criteria or in the way VAT is calculated in one system versus another. In most cases, these discrepancies are no more than 1 cent.
In this post, we explain how to configure Business Central to allow these VAT differences and set a limit for them.
First, go to General Ledger Setup, and in the field “Max. VAT Difference Allowed”, specify the maximum amount—positive or negative—that you want to allow for VAT adjustments.
Next, in Purchases & Payables Setup, locate the field “Allow VAT Difference” and enable it.
This way, when you are about to post a purchase invoice in Business Central and notice that the total amount or VAT amount does not match the vendor’s invoice, you can go to the Statistics page before posting and adjust the VAT Amount up or down to match the vendor’s figures, as long as the adjustment does not exceed the limit defined in the General Ledger Setup. Let’s look at an example:
Suppose we receive an invoice for €1,813.20 with VAT of €380.78 and a total of €2,193.98. When entering it in Business Central, due to line rounding, we obtain different totals, as shown in the image:
We can see that there is a difference of 1 cent. In this case, before posting the invoice, we go to the Invoice Statistics option.
In the VAT lines, we adjust the corresponding VAT amount and verify that the total invoice amount is updated accordingly.
If you would like to expand your knowledge of Business Central, feel free to contact ABD Consulting and IT Solutions.
More information at: Microsoft