For some time now, on the website of the National Revenue Agency, any company can receive a report on the purchases it made in a certain month, which is prepared from the information submitted in the diaries of the counterparties. In this way, each company can compare the purchase diaries it prepared for the respective month and control the completeness of the recorded purchases.
Some colleagues would say that this is explicitly done because it is possible that some purchase invoices are not posted in the month they relate to, but are deliberately left to be posted in a subsequent month. This is true, but if in this comparison only these invoices appear as differences, we will judge that the information in the purchase journals prepared by the company does not contain discrepancies.
With such a check, however, we can detect the following discrepancies in time:
A) Purchase invoices not submitted to accounting;
B) Submitted invoices in accounting, but not reported by the counterparties;
C) Invoices that are accounted for differently in the company and at the counterparty;
The VAT law says that if a person is not registered under this law, he has no right to issue invoices in which he has charged value added tax. If a counterparty is in bad faith and after deregistration issues an invoice with added value tax charged, we will not be entitled to a tax credit on this invoice. Such cases are usually revealed during tax audits and the NRA reverses the tax credit on these invoices. However, with such an inspection, we can detect our unscrupulous counterparties in advance and save ourselves the inconvenience of tax audits.
Invoices reported differently by us and our counterparties are not to be underestimated, especially when they are of great value. Some time ago, we discovered an invoice of quite a large value, for which our company had used a tax credit. At the same time, the same was submitted by our counterparty as a “zero value invoice”, i.e. cancelled. We contacted the company and they did their due diligence. It turned out to be a technical error. More importantly, they charged her in the next month. This and other case studies confirm the usefulness of such a control. You can request the reference on the new NRA website:
Services->Inquiries->Providing a report on the declared sales by VAT registered persons for a certain tax period N=2688
https://portal.nra.bg/details/ref-sales-period
The report that the NRA provides is in CVS format, and the logs we submit to the NRA are in TXT format. In order to do the check, we need to convert the two files into .xls/.xlsx format, using the functions of MS Excel for this purpose. After that we can compare the two logs also using the functions of MS Excel. I wouldn’t say it’s difficult, but it does require knowledge and time to do. It is good to do these checks more often and without wasting unnecessary time. This check can also be done for several months at a time. That is why it is good to automate this control.
We can save time and effort with the MS Excel add-in Adasoft.Office.Analytics. This add-on has many other useful functions for auditors and accountants, but here we will briefly describe this function related to the verification of VAT logs.
We provide you with a link where you can download a “demo” of the module:
https://www.ada-soft.bg/bg/mproducts/tproducts/adasoft-office-analytics
The demo works with a limited number of lines (500) of the files, but you could familiarize yourself with the functionalities and make your choice.
After installing the module, an additional “Analytics” “tab” will appear in the MS Excel menu. The functionality for automated conversion of the VAT files and ingestion into MS Excel is located in the “Import” section. From the drop-down list, select “VAT Journals-Purchase”. Select the folder where the “purchases” logs are located, as they were submitted to the NRA. You can also select a folder with the diaries for more than one month, for this purpose divide the individual months into separate subfolders subordinate to the selected one. The system recognizes these folders and displays a list of found files. There is a check mark against each file. If you wish not to ingest any of these files – uncheck the box. When you press the “OK” button, the system will create a “purchases” file for you and merge all purchases from the specified files.
For the file from the National Revenue Agency, use “Import” again, specifying “Reference of the National Revenue Agency for the sales submitted in the VAT journals of the counterparties”. Specify the folder where the file is located. The module will recognize the file(s). In the same way, if references from the NRA have been downloaded for more than one month and are placed in separate subfolders, the system will list them on a screen with the possibility of rejecting some of them if necessary. If we press the “OK” button, the system will create a Shia “NAR Reference” and summarize all the files.
And now it remains to compare the two Shiites. So that you don’t wonder which column to compare the sums on, our advice is to create a “summary” column in both Shias to collect the sums from all the other columns. From the Analytics add-on, select “Merge Tables”. Select the “regions” you will compare from the two Shias. As the columns for comparison, it is most appropriate to select the identification number of the counterparty and the document number, as the column for calculating the difference, select the “summary” amount.
Everything is done very easily and quickly, so you will experience real pleasure in using this functionality of the module. You can also apply grouping of the data so that you initially make a summary table with the totals by counterparties. Whatever method of comparison you choose, it will certainly become easy and you will be convinced of the usefulness of doing this control, especially when it does not cost you a lot of time and effort.
