Avalara VAT Reporting is a third-party application that enables you to file your VAT returns and other indirect tax compliance reports in 35 countries, including all EU member states. By using the integration, you can send your financial data from FinancialForce Accounting to Avalara VAT Reporting.
Avalara VAT Reporting accepts XML documents that contain transaction data generated from Accounting. This enables you to send your sales and purchase invoices, as well as sales and purchase credit notes to Avalara VAT Reporting and report on them to the appropriate authority.
XML documents are generated using a scheduler with a predetermined frequency. Once the documents are generated, they are automatically sent to Avalara and stored in Avalara SaaS. To enable the generation of XML documents, you must configure the fields in the Avalara VAT Reporting Settings (FF) custom setting. For more information, see Setting Up the Avalara VAT Reporting Integration.
The integration is preconfigured to work with the following localizations of Accounting :
- Belgium and Luxembourg
- Denmark and Finland
- France
- Germany and Switzerland
- Italy
- Netherlands
- Spain
- Sweden and Norway
For countries not on this list, you may need to map specific fields. For more information, see About the Avalara VAT Reporting Mappings.
For more information see, Using Localization.
Limitation - Journal Documents
Avalara VAT Reporting does not support journal documents. If you make tax adjustments using a journal, that tax amount is not reported in your VAT return.
An example of the possible importance of journals is when correcting tax code errors. For example, if in a sales invoice you incorrectly entered the tax code as an input tax code, instead of an output tax code. If this same invoice is already posted, you might create an additional journal line item in order to correct the tax code error, like in the table below. This is common practice in the UK, but not allowed in other countries, for example Spain.
|
Line Number |
Line Type |
General Ledger Account |
Tax Code |
Taxable Value |
Debit/Credit |
Value |
|---|---|---|---|---|---|---|
| 1 | Tax Code | 2170 - VAT Input | VI-S | 10,000.00 | Debit | 2,000.00 |
| 2 | Tax Code | 2180 - VAT Output | VO-S | -10,000.00 | Credit | 2,000.00 |
Workarounds
- Recommended - Credit the incorrect invoice. Create a credit note document canceling the original invoice. Then create a new invoice with the correct values. By doing this, no manual adjustment is required in the Avalara environment, and there is no need to keep both FinancialForce Accounting and Avalara balanced, because the background process collects the information, which is already fixed.
- Create a manual document in the Avalara VAT Reporting environment, in the same way as the table above. However, in this case you must also apply the adjustment in Avalara to keep both FinancialForce Accounting and Avalara balanced.
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