Author: Kiu Global

Sometimes in business, you may receive a payment in advance from a customer, or    you may have to pay an advance to your vendors before you place an order. As soon   as you receive the payment in the bank, create a bank statement and reconcile it, as it is a payment in advance from the customer; don’t select the counterpart at reconciliation.

When you have a partner linked to the entry without a counterpart, you will get the    VALIDATE button instead of the RECONCILE button. Click on the VALIDATE button to    process those entries; that will be considered as an advance from the customer or to    the vendors.

After issuing invoices to customers, you can match this prepayment with invoices through Manual payment and invoice matching tab in Accounting module.

You can also use this function in case you process payments via Payments in Sales/Purchases tab.

After reconciliation, system will generate matching numbers for reconciled transactions, which help you keep tracks of all receivable and payable transactions with payments.

→ How to register a payment for a Vendor Bill

To create a payment for an open vendor bill directly, you can click on Register a Payment at the top of the form.

From there, please select the payment method (i.e. Checking account, credit card, check, etc…) and the amount you wish to pay. By default, KIU will propose the entire remaining balance on the bill for payment. In the memo field, we recommend you set the vendor invoice number as a reference (KIU will auto fill this field from the vendor bill if set it correctly).

You can also register a payment to a vendor directly without applying it to a vendor bill. To do that, go to Purchases ‣ Payments. Then, from the vendor bill you will be able to reconcile this payment with directly.

→ How to register batch payments for Bills from a Vendor

 You can pay multiple bills from a vendor in Accounting module. Go to Purchases ‣ Vendor bills. Make sure all bills come from the same vendor.

Insert the details of the payment. The system calculated the total amount for both bills, but you can modify it freely. Click on Validate.

→ How to register batch payments for Bills from different Vendors

In case of payment for different vendors, you select vendors that you would like to pay ‣ Actions ‣ Batch Payments ‣ Make payments. 

→ How to record a new vendor bill

When a vendor bill is received, you can record it from Purchases ‣ Vendor Bills in the Accounting module. As a shortcut, you can also use the New Bill feature on the accounting dashboard.

To register a new vendor bill, start by selecting a vendor and inputting their invoice as the Vendor Reference, then add and confirm the product lines, making sure to have the right product quantities, taxes and prices.

Save the invoice to update the pre tax and tax amounts at the bottom of the screen. You will most likely need to configure the prices of your products without taxes as KIU will compute the tax for you.

→ How to validate The Vendor Bill

Once the vendor bill is validated, a journal entry will be generated based on the configuration on the invoice. This journal entry may differ depending on the accounting package you choose to use.

For most European countries, the journal entry will use the following accounts:

• Accounts Payable: defined on the vendor form
• Taxes: defined on the products and per line
• Expenses: defined on the line item product used

For Anglo-Saxon (US) accounting, the journal entry will use the following accounts:

• Accounts Payable: defined on the vendor form
• Taxes: defined on the products and per line
• Goods Received: defined on the product form

You can check your Profit & Loss or the Balance Sheet reports after having validated a couple of vendor bills to see the impact on your general ledger.

Every transaction is recorded in the default currency of the company. For transactions occurring in another currency, KIU stores both the value in the currency of the company and the value in the currency of the transaction. KIU can generate currencies gains and losses after the reconciliation of the journal items.

In the accounting module, Go to Configuration ‣ Settings and flag Allow multi currencies and set journal for foreign exchange difference, then click on Apply.

→ View or edit currency rate being used

You can manually configure the currency rates in Configuration ‣ Currencies. Open the currencies you want to use in KIU and edit it. Make sure the currency is active.

Click on View Rates to edit it and to see the history :

Click on Create to add the rate. Fill in the date and the rate. Click on Save when you are done.

→ Configure your charts of account

In the accounting module, go to Adviser ‣ Charts of Accounts. On each account, you can set a currency. It will force all moves for this account to have the account currency.

If you leave it empty, it means that it can handle all currencies that are Active.

→ Configure your journals

In order to register payments in other currencies, you have to remove the currency constraint on the journal. Go to the Accounting module, Click on Configuration ‣ Journals.

 

Define the taxes that should be applied for a specific customer/vendor or invoice. Example: If some customers benefit from specific taxes (government, construction companies, EU companies that are VAT subjected,…), you can assign a fiscal position to them and the right tax will be selected according to the products they buy.

Sometimes called Cost Accounts, are accounts that are not part of the chart of accounts and that allow you to track costs and revenues. Analytic accounts are usually grouped by projects, departments, etc. for analysis of a company’s expenditures. Every journal item is posted in a regular account in the chart of account and can be posted to an analytic account for the purpose of reporting or analysis.

Payment terms describe how and when a customer invoice (or supplier bill) should be paid over the period of time. Example: 30% direct payment, balance due in two months.

Note: The last line’s computation type should be “Balance” to ensure that the whole amount will be allocated.

→ How to create a new tax

 Open the menu Configuration ‣ Tax, the click on the Create button.

When you create a new tax, you can set the following information:

Scope: Sales, Purchases or None (e.g. depLabel on Invoices:recated tax)

Tax Account: is the account where the tax journal item will be posted. This field is optional, if you keep it empty, KIU posts the tax journal item in the income account. a short text on how you want this tax to be printed on invoice line. For example, a tax namely “21% on Services” can have the following label on invoice “21%”.

Tax Group: defines where this tax is summed in the invoice footer. All the tax belonging to the same tax group will be grouped on the invoice footer. Examples of tax group: VAT, Retention.

Include in Analytic Cost: the tax is counted as a cost and, thus, generate an analytic entry if your invoice uses analytic accounts.

Tags: are used for custom reports. (usually, you can keep this field empty)

Tax Computation: Select type of tax computation

• Group of taxes: groups of more than 01 taxes.

The group of taxes helps us to apply the multiple taxes under the same name, sometimes it also known as a composite tax. 

For example, the composite tax 15% ( 10%+ 5%), it will compute two different taxes 10% and 5% separately on the invoice.

• Fixed: Fix amount of tax
• Percentage of price: Percentage of tax based on product price
• Percentage of price tax included: Price is net amount after tax. Normally, it will be applied for withholding tax of employee wages.

→ How to set default tax

Open the menu Configuration ‣ Invoicing & Payments ‣ Taxes, choose taxes which you would like to set defaults.

Once taxes are set by default, when you create a new product, KIU will propose you the right taxes by default on the product form.

Note

Setting the default taxes impact the creation of product, but not sales order or invoices. The tax used on sales order or invoices is defined by the product on the sale order line.

→ How to adapt taxes to your customer status or localization

In KIU, the default tax to apply on a product/service is set on the product form. But, some customers may have specific tax rates because of their status (in some countries, construction companies are VAT exempt) or their location (customers in a different country, state and/or city may be subjected to another tax rate).

In order to select the right tax to apply according to the customer or product, KIU uses the concept of fiscal positions. If a customer has a specific fiscal position, the default tax may be replaced by another one. (as an example, construction companies have 0% instead of 21% in Belgium for construction related work).

As an example, in Belgium, for the VAT tax, there are 3 fiscal positions depended on the country of the customer and some companies (like construction companies) benefit from a specific fiscal treatments:

• Belgian companies: with 21% VAT (default, on product form)
• European companies: with 0% VAT (intra-EU)
• Other countries: 0% (but a different tax since it uses different accounts)
• Construction companies: with 0% VAT, only for construction companies in Belgium

To set up Fiscal Position, go to Configuration ‣ Fiscal Position under the Accounting    module. Create a new position and set the name, and then set TAX MAPPING. For example, replace 5% with the 10%. Check the following screenshot:

→ How to set tax- included prices/ How to manage prices for B2B (tax excluded) and B2C (tax included)

When working with consumers, prices are usually expressed with taxes included in the price (e.g., in most eCommerce). But, when you work in a B2B environment, companies usually negotiate prices with taxes excluded.

KIU manages both use cases easily, as long as you register your prices on the product with taxes excluded or included, but not both together. If you manage all your prices with tax included (or excluded) only, you can still easily do sales order with a price having taxes excluded (or included).

This documentation is only for the specific case where you need to have two references for the price (tax included or excluded), for the same product. The reason of the complexity is that there is not a symmetrical relationship with prices included and prices excluded, as shown in this use case, in Vietnam with a tax of 10%:

• Your eCommerce has a product at 100,000VND (taxes included)
• This would do 90,909 VND (taxes excluded) and a tax of 91 VND

But for the same case, if you register the price without taxes on the product form (90,909 VND), you get a price with tax included at 99,999 VND, because:

• 90,909VND * 1.1 = 99,999 VND

So, depending on how you register your prices on the product form, you will have different results for the price including taxes and the price excluding taxes:

• Taxes Excluded: 90,909VND & 100,000VND
• Taxes Included:  90,909VND & 99,999VND

Note:

If you buy 100 pieces at 100,000VND taxes included, it gets even more tricky. You will get: 10,000,000 VND (taxes included) = 9,090,909VND (price) + 909,091VND (taxes) Which is very different from a price per piece at 90,909VND tax excluded.

This documentation explains how to handle the very specific case where you need to handle the two prices (tax excluded and included) on the product form within the same company.

If you negotiate some prices with tax excluded and, for other customers, others prices with tax included, you must:

1. Always store the default price TAX EXCLUDED on the product form, and apply a tax (price included on the product form)

2. Create a price list with prices in TAX INCLUDED, for specific customer

You can activate the pricelist feature per customer from the menu: Configuration ‣ Settings of the Sale module. Choose the option different prices per customer segment.

Then set the price list in product form. 

3. Create a fiscal position that switches the tax excluded to a tax included

In Accounting module, open the menu Configuration ‣ Fiscal Positions ‣ Create

4. Assign both the pricelist and the fiscal position to customers who want to benefit to this pricelist and fiscal position

→ How to manage withholding taxes

A withholding tax, is also called a retention tax, is a government requirement for the payer of a customer invoice to withhold or deduct tax from the payment, and pay that tax to the government. In most jurisdictions, withholding tax applies to employment income.

With normal taxes, the tax is added to the subtotal to give you the total to pay. As opposed to normal taxes, withholding taxes are deducted from the amount to pay, as the tax will be paid by the customer.

For example, in Colombia you may have the following invoice:

In this example, the company who sent the invoice owes $20 of taxes to the government and the customer owes $10 of taxes to the government.

To configure withholding tax, go to Accounting module ‣ Taxes ‣ Create

In order to make it appear as a retention on the invoice, you should set a specific tax group Retention on your tax, in the Advanced Options tab.

Once the tax is defined, you can use it in your products, sales orders or invoices.

Open the menu Configuration ‣ Bank Accounts, then click on the Create button.

Fill your bank account number and other information in the bank account form.

A journal is like a folder in which you record all transactions of the same type: all the statements of a bank account, all customer invoices, all supplier bills. It’s used to organize similar transactions together.