UAE VAT ACCOUNTING SOFTWARE

What is VAT ?

Value-Added Tax or VAT is a tax on the consumption or use of goods and services levied at the point of sale. VAT is a form of indirect tax and is used in more than 180 countries around the world.

VAT In UAE

The UAE has levied Value Added Tax (VAT) from January 2018. The rate of VAT is 5 per cent.

VAT will provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.

Implication of VAT on individuals

VAT, as a general consumption tax, will apply to the majority of transactions in goods and services. A limited number of exemptions may be granted.

As a result, the cost of living is likely to increase slightly, but this will vary depending on an individual’s lifestyle and spending behavior. However rate of VAT  being minimal of 5% compared to other countries who pay VAT to the extent of 20% to 25%,UAE  individuals  and entities will not find the burden of VAT implementation.

Implication of VAT on businesses

Businesses will be responsible for carefully documenting their business income, costs and associated VAT charges. Businesses that meet the minimum annual turnover requirement (as evidenced by their financial records) will be required to register for VAT. Businesses that do not think that they should be VAT registered should maintain their financial records in any event, in case the ministry needs to establish whether they should be registered.

Registered businesses and traders will charge VAT to all of their customers at the prevailing rate and incur VAT on goods/services that they buy from suppliers. The difference between these sums is reclaimed or paid to the government.

Criteria for VAT Registration.

• If the Annual Turnover of the company is more than AED 375,000/, it is mandatory for the company to register under UAE VAT before the end of the year 2017.
• If the Annual Turnover is between AED 187,500 & AED 375,000/, it is optional for the company to be registered under UAE VAT law.
• If it is less than AED 187,500/, the company need not register under this law.

For the startups, if the VAT attracted expenses are more than AED 187,500/, (USD 50K) such companies have to be registered under the UAE VAT law.

The threshold mentioned above will be calculated as follows:

Ø The total value of supplies made by a taxable person for the month in which he is applying for VAT registration and the previous eleven months.
Ø The total value of supplies of the subsequent 30 days on which he is applying for VAT registration.

If in any of the above two options, the turnover is more than AED 375,000/- the company has to register for VAT.
For arriving the turnover for VAT registration purpose, value of exempted supply will not be considered.

VAT-registered businesses generally:

• must charge VAT on taxable goods or services they supply
• may reclaim any VAT they have paid on business-related goods or services
• keep a range of business records which will allow the government to check that they have got things right.

VAT-registered businesses must report the amount of VAT they have charged and the amount of VAT they have paid to the government on a regular basis. It will be a formal submission and it is likely that the reporting will be done online.

If they have charged more VAT than they have paid, they have to pay the difference to the government. If they have paid more VAT than they have charged, they can reclaim the difference.

Guide for the business entities to be VAT ready

1. Explore best VAT Software – Adapt and Align with your business activities
2. Build the organizational competency by educating your teams on the fundamentals of VAT and its impact on your business
3. Review your business processes, practices and procedures – mainly pricing, procurement, invoicing, logistics etc. in line with VAT requirements and align accordingly
4. Ensure books of accounts are accurate and update date
5. Inform your vendors and customers about VAT and subsequent impact on transactions
6. Preparation &Transitioning to VAT
7. Under the UAE VAT law the books of accounts and records are to be maintained for five years.

Getting Started with Implementation of VAT in business

What is an Accounting Software:

Accounting software is a type of computer software used by accounting professionals to manage accounts and perform accounting operations.

Accounting is the systematic practice, work or process of communicating and recording financial information. In a business setting, this is done for the purposes of internal and external audits, required reports and financial analysis to meet legal or internal managerial requirements. Accounting may also include systematic and diverse measurement, classification, verification, summation and interpretation of financial information.

Accounting software can range from simple, single-entry programs used for individual record-keeping to more sophisticated, double-entry systems that can process accounts receivable, accounts payable, payroll and inventory, among other functions.                                        

Is your Accounting Software VAT ready?

One of the process plans in being VAT ready is subscribing for the perfect VAT accounting software, meeting all the business requirements and also providing scope for the business to grow.

Every taxable entity registered under VAT has to file returns online every month or quarter depending on the nature of their business.From a compliance perspective, businesses that work with automated software in any way will need to update their tools to incorporate the new VAT laws. This update will affect sales operations, accounting methods, and expense management systems, therefore companies need to be confident of being VAT-compliant in all realms of the business. Besides managing business finances, software should be able to capture your contacts’ VAT details, raise VAT compliant invoices, create business reports, and generate VAT returns without hampering day to day operations.

Below are mentioned key features of an  VAT accounting software to satisfy the business needs.

• Branch, Department, Employee and User Role management
• Inventory Support; Warehouse, Product and Product Price Management.
• Provides all the normal accounting transactions including Contra, Payment, Receipt, Journal, and Service Vouchers,  Bank Reconciliation, Stock journal etc.
• Sales and Purchase Management
• Financial Statements including Profit and Loss, Trial Balance, Balance Sheet, Cash flow, Fund flow and Chart of accounts.
• Budgeting and budget Variance
• Service Management
• Detailed Reporting including
• Account Group and Ledger wise report
• Day Book, Cash Book
• * Stock report
• * Sales and Purchase report
• * Ageing Report
• * C/O Report
• * Product Statistics Report
• * VAT Reports etc.
• Calculate VAT automatically.
• VAT support in Sales, Purchase, Sales and Purchase returns, Journal entries.
• Generate Federal Tax Authority compatible tax reports.
• VAT Paid (charged by suppliers) and Vat Collection (Charged to customers) Analysis.
• Transaction wise details of VAT paid and VAT collected.
• Attach every Vendors/Customers VAT number and other details.
• VAT supported for Goods (stocked) and Service (non-stocked) items.
• Online application accounting.
• VAT Account Reconciliation, VAT Collection & VAT Paid analysis report.
• Report export to excel and other standard formats.
• VAT return statement compatible with Federal Tax Authority standards.

Reach Accountant Best VAT Software  in UAE

Being a resident of UAE or business entity it is mandatory to align business operations as per the new taxation reform. There would be many questions and perceptions running in one’s mind. One of the important concerns would be will the business be affected if new prescribed rules and regulation regards to new taxation system are not adhered. Like filing returns on time, maintaining accounts of books ,generating invoices as per VAT mandate. A mentor preferably who can be there at all time to assist and answer all the queries relating to VAT. Reach VAT software is the perfect solution proving to be your best companion in the VAT transition period.  It is also compliant with the VAT guidelines as prescribed by the FTA (Federal Tax Authority) of UAE.

Reach Extended services can be availed by:

The above industries can avail the benefit of using Reach VAT Software to be VAT compliant.

Top Features of the VAT Software are:

• Accounting Management: All functions relating to accounts are inbuilt with the software. You can manage your Accounting Ledgers, Bank & Cash Operations, Purchase & Sales Estimates, Warehouse Allocations, Expense Recording, Expense Grouping, Payments – Part or Full, Journal Entries, Income and loss a/c, Balance sheets, Receipts – Part or Full, Contra Entries, Financial Reports, Day book.

• Tax Management: Our accounting Software automatically calculates the taxes relevant for every bill created. The Software is designed as per the government norms for calculation of VAT. It also has the option to add any number of taxes relevant to the business. In case of change in tax percentages a change it in the software on your own. All you have to do is add your tax percentage and our software will calculate the taxes automatically. This multiple tax scheme can also be applied to multiple products on a single purchase.

• Income Management: The Company can create Quotations then the same can be converted as a Sales order or Pro-forma invoice or Invoice. From Invoice you can create Receipts as well. Accountants will be able to know what payments have been received and what are pending in the reports. You can also set reminders for receiving payments.

• Expense Management: You can create Purchase Orders then the same can be converted as bill or payments. You can also create Debit notes for purchase returns. Accountants will be able to know which purchase bills have been paid and which are pending in the reports. You can also set reminders for making payments.
• Invoicing: Generates VAT compliant invoice of the company in the specified design as requested by the client or can choose from the available templates in the software. It also converts quotes to invoice .One of the features is the software can convert the Foreign currency invoices to base currency and further calculating the VAT at UAE standard rate.

·         Print Tax Invoice In Arabic: Reach software lets you print invoices in Arabic, English or both, as per the mandated guidelines of GAZT and FTA.

• Auditor View: Full-fledged Financial reports, Tax reports VAT reports, read process by auditor, with e-filing options, PF & ESI Reports, Tax Consulting Modules are some to be named.
• Check Post for VAT returns: As the software has been designed exclusively to aid individuals and entities to be VAT compliant in UAE, the set of rules and regulation laid by FTA (Federal Tax Authority) of UAE are embedded in the software. Hence any process error will be popped up by the application can be viewed .For instance wrong Tax Registration Number, incorrect taxable figure, wrong taxation period.
• Automatic Update on Tax legal Sections: As the Reach software are cloud computed software gets upgraded to update any revised tax laws and section if any in future.
• Computation Of VAT Returns: The software is inbuilt with all the detailed crucial information  on tax computation Tax Assesee can  fetch all the details of all the taxable transactions It lists down transactions which are included and excluded in the VAT return  calculate input tax, reverse charge and output tax to avail claim if any

• Filing Of VAT Returns: The registered businesses in UAE are required to generate the VAT return File from their accounting software, login to the FTA’s e-tax portal and upload the return file. On the basis of the uploaded return file, the e-tax portal will validate the file and accordingly the details from the file will be auto-populated in the online return form. Reach VAT software is designed to ease the process of filing returns and comes under the purview of FTA prescribed set of rules and regulations.

• Receipt: Receipts can either be manually entered or imported it in excel format easily.
• Payments: Payments can either be manually entered or imported it in excel format easily.
• Multi Company: Manage business through comfort of the smart phone.
• Tally Import: Tally files can be easily imported to Reach Software of various periods and manage business easily.
• Auditor’s Report: Full Financial Report are available,Read process by Auditor,Tax Reports,VAT Report with e-filing options,PF & ESI Reports,Tax Consulting Modules are some features mentioned.
• Mobile Application: Access business information through tabs and android smart phones, pick photos of expense vouchers and attach to expenses, daily profitability and other key reports can be viewed on phone.
• Bank Synchronization: Bank Statements can be imported in to Reach software through excel files.
• Security: There is complete security of data stored in the hard disk. Data can be accessed and control by creating access restriction. One time password facilities also ensures a check in the log in to the website.

• Run Business from anywhere: The business can be run access data from anywhere at your comfort. Just like checking mails from the laptop or systems.

• Free and Automatic Upgrades: At Reach Accountant you will be provided free services of upgrading the software frequently with new features and use it absolutely free.

• No investment in expensive hardware: The software is browser based. It just requires internet connection which can be connected to multi computers without using LAN and servers.

• API: The client can integrate the existing software with Reach accounting application ,

• Automatic Data Backup: Reach stores all the data in servers offsite with regular backups. Hence business information is safe and secure

·         User Interface & Complexity:The software is designed to make its use friendly and easy,no cumbersome process to operate the application and software.

• Scalability:It is an VAT accounting software which can scale with your business needs. . Some software companies offer only one version of the product and some have progressive versions depending the business type or size. Reach Accounting software offers both integrated an entry level version as well as a feature rich version which you might not need for the current business processing but will definitely need in future for business development.

Top Two Features of the Reach Accounting Software

• Outsourced Accounting: The software enables to finish the outsourced accounts in less than 30 minutes.

• Real Time Accounting: Allows client to record sales and purchases online, while finalizing accounts that is checking the Audit trail, providing MIS reports, checking Tax reports, printing financial reports and filing taxes.

Technology Used

Reach has implemented the latest technology Cloud Computing to handle  day to day business transactions just  a click away from your browser from any part of the world.

Cloud Computing is a concept through which organizations can manage their data centres, processes and applications online via internet on the scheme of pay for use basis.

Advantages of Cloud Accounting Software:

– Nothing to install. Just signup and start entering your transactions
– You don’t have to worry about upgrades as all changes are pushed automatically. Online softwares are always up to date.
– Can be accessed from any internet enabled device at any point of time
– Cloud accounting software providers take care of backup and maintenance which is a cost saving for you.
– Data across all your offices is always synchronised.
– It can integrate with other cloud based applications.

Pricing:

AED 1800 single user, per year
AED 3600 five users, per year
AED 5000 unlimited users, per year

Tally

Tally is appropriate for all business requirements. It provides extensive coverage for operating business through the varied features of Tally ERP.9

• Accounting and finance
• Inventory management
• Sales management
• Purchase management
• Manufacturing and job work
• Banking
• MIS reporting
• Data Security

Price
Single user AED 2,250
Multi user AED 6,372

Comparison Table

Reach accountant proves to be your best companion to resolve and   tackle all business issue pertaining to financial reports, auditing ,reformation of business structure in lines with new taxation regime and for business success and growth.