Documentation/ Accounting/ VAT, withholding and bank sub-accounts
VAT, withholding and bank sub-accounts
Three accounts that are neither the expense account nor the supplier account, and that are easily forgotten because you only notice them when one is missing: the VAT sub-account, the withholding account and the bank account.
Document › Accounting · and Client or company management
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The three accounts at a glance
| Account | Where it is set | When it is needed |
|---|---|---|
| VAT sub-account | On the document | Whenever the document carries tax. |
| Withholding account | On the document | Only where the document has withholding (IRPF). |
| Bank account | On the company's record | Only where documents are marked as paid or collected in cash. |
The important difference is in the middle column: the first two are given document by document; the third is set once per company.
The VAT sub-account
This is the account the tax itself goes to: input VAT on a purchase, output VAT on a sale. It is chosen in the document's accounting section, from the same chart of accounts as everything else.
Worth telling it apart from something else also called VAT that has nothing to do with it: an item's tax rate, which lives on the product master and decides whether the line goes at 21 or at 10 per cent. One is the percentage; the other is the account the tax is recorded in.
Nor is it the VAT breakdown on the header, which splits net amounts and tax by rate. That breakdown says how much; the sub-account says where.
The withholding account
This is the account the withholding applied is recorded in, typically the income tax withheld (IRPF) on a professional's invoice. It only means anything on documents that carry it.
The amount withheld is held in the amounts section of the header, with its percentage and its figure. The account given here is where that amount gets posted.
A document with withholding and no withholding account assigned is posted incomplete: the amount has nowhere to go.
The bank account
This is the company's till or bank, and it is not set on the document but on the company's or managed client's record. The screen describes it as the client's till or bank, the contra entry for the payment entry on invoices marked as paid or collected in cash.
Its role is specific: when a document is marked as settled in cash, there has to be an account for the payment to go against. That is the one.
If you do not mark documents as paid or collected in cash, you do not need this account. It only comes into play in that case.
Contra account and contra sub-account
The company's record also holds a contra account and a contra sub-account. They are the entry's default destination when the document says nothing else.
They are set in the record's accounting information section, alongside the bank account. They are initial set-up: put in once and not touched again unless the policy changes.
The no-bank-account warning
Turning the cash switch on for a document whose company has no bank account, the application warns you at once. It says the client has no bank account set and that the payment entry will not be generated until one is set on the client's record.
It is not an error that stops you saving: the document saves anyway and the switch stays on. What is not generated is the payment entry. Which is why the warning says exactly where to fix it.
A check before you start
Before processing a company's first batch of documents, worth verifying:
- The chart of accounts is loaded.
- The company's record has a contra account and, if you are going to use the cash switch, a bank account.
- Your regular suppliers' records have their supplier account and expense account.
- The VAT sub-accounts you are going to need exist in the chart.
- If you work with professionals, the withholding account exists.
Five checks that take ten minutes and save going back over documents one by one afterwards.
Things that come up
| What you see | Why | What to do |
|---|---|---|
| It warns that there is no bank account | The company's record has none set. | Add it on the client or company record. |
| The VAT amount ends up with no account | No VAT sub-account was given on the document. | Give it in the accounting section. |
| The VAT rate gets confused with the sub-account | They are two different things with similar names. | The rate is on the product; the sub-account, on the document. |
| A document with withholding does not balance | The withholding account is missing. | Assign it and go over the header's amounts again. |
| The payment entry does not appear | The document is marked as cash but there was no bank account when it was saved. | Set the account and save the document again. |