Hi there, I’m back with reflections on what we did in FY15 for QuickBooks Online (QBO) for India. We’ve been busy and very proud of our accomplishments in FY15. We have introduced a lot of exciting features and enhancements for our India customers (both SMB, Accountants) from Invoice, Sales form improvements to Tax & Compliance workflow to integrated Payroll and other value add Apps from our eco system. Before I go into details, we would love to hear your feedback on any of the features or improvements discussed here or otherwise. The best way to provide feedback is in-product voice of customer (feedback) option in the product.
Click on settings (gear icon) on the top right and click on Feedback under company. In addition, if you have any questions or issues, you can also send an email to qboindia at intuit dot com. In FY15 (~Aug ’14 to July ’15), the following are some of the key items we released:
- Invoice and Sales Form:
- Separation of Tax & Retail Invoice
- Ability to Round Off Paise (up or down)
- Proper printing of CIN, TIN and other registration numbers
- Ability to upload your own template (through QBO Labs)
- Line level discount (coming soon!)
- Tax and Compliance
- Sales Tax (VAT/CST)
- Service Tax
- Schedule VI
- Integrated Payroll
- Deeply integrated Payroll from Employee link within QBO powered by Paybooks
- Guided Payroll, Accounting integration with QBO & more
- Employee Self-Service and other robust payroll functionality
In addition to the above we made many improvements to core QBO offering around Bank feeds, Reporting (Management Reports), Mobile experience (both Android, iOS) and launched 3rd party Apps within QBO. Invoice and Sales Form Separation of Tax & Retail Invoice: For many of you there is a need to separate Tax & Retail Invoice. By default all Invoices are processed and printed as ‘Tax Invoice’. If you have a need to separate Tax and Retail invoice, you have to first turn on the setting to do so. Go to Company Setting -> Sales, and turn on ‘Classification of tax and retail invoices’ within Sales Form Content.
Once you turn on the settings, the invoice creation will automatically choose Tax Invoice or Retail invoice based on whether the customer selected is registered (i.e. Tax Reg. No. is filled). If your customer is registered and you have not set their registration number in QBO, you add to do that first. Edit the customer, click on Tax Info and enter the Tax Reg. No.
After this, every time you create the invoice for this customer, QBO will generate a Tax Invoice. In case the customer is unregistered or retail customer, you don’t need to enter the Tax Reg. No. & QBO will automatically consider the invoices to retail customer as ‘Retail Invoice’. QBO also provides you with the flexibility of changing any invoice to Retail (for Registered customers) or vice versa based on your business need. To do this, just select the drop down to change from Tax to Retail invoice or vice versa.
The type of invoice will also be reflected in the actual print or preview as shown below.
Round off: Round off rounds the paise to the nearest rupee. QBO round amounts down to the nearest rupee if an amount includes less than 50 paise, and round amounts up to the nearest rupee if an amount includes 50 or more paise. By default, Round off is turned off. If your business needs to round off amounts, first turn the settings on.
What is shown above is only if you want to round off Sales transactions. If you want to round off expenses or purchase transactions then you can turn on Round off for that too. Typically expenses or purchases are entered “as is” based on what your vendor bills you for record keeping so round off may not be needed. Let me show you how round off will appear in a QBO invoice. Here the Total comes to 1008.42 so QBO rounds it down to 1008.
However, QBO provides flexibility to change the fraction. A good use case could be you don’t want to round off for a particular transaction; in that case you can reset the fraction to 0 to retain the round off portion.
Corporate Identification Number (CIN) Number: As per Companies Act, it is mandatory to mention Company CIN in Invoice and other documents. You can configure your CIN in the company setting as shown below.
Once you have setup the CIN number, it will be printed in the Invoice and other forms.
Ability to upload your own Invoice template! (BETA) Another exciting feature we launched as BETA in our QBO labs is the ability to upload your own invoice template to QBO. This provides ultimate flexibility and can take care of multiple needs for India customers such as placement of logo, match what client accepts as an invoice today, flexibility in static fields and descriptions such as VAT declaration.
Note: QBO Lab features are considered BETA and should be treated as experiments that we release to get customer feedback and usage before we release it as generally available feature. First, to turn on this feature, you need to go the QBO labs.
In QBO labs, turn on Import style if you want to try this feature.
Once you turn on the feature, you can go to Custom Form Styles and choose Import style and then follow the instruction in the guided wizard.
Tax & Compliance Sales Tax (VAT/CST)
We released an enhancement to QBO VAT/CST flows in April coinciding with India FY15-16 Financial year. You can find more about it in our previous blog Service Tax Consistent with Sales Tax (VAT/CST) update, we’re enhancing the Service Tax accounting and workflow to best suit for India accounting practice.
Note: In order to keep the transition smooth, the new model will be turned on effective Oct 1st, 2015 (in order to coincide with the 2nd Half/ 3rd quarter of the India financial year). This applies to Tax Center changes and reverses charge enhancements. Chart of Accounts: As with Sales Tax (VAT/CST), QBO will have separate Output and Input Service Tax. We have also included dedicated accounts for the Reverse Charge mechanism. Reverse charge you owe will be recorded in Output Service Tax RCM and the corresponding entry will be recorded in Input Service Tax RCM that will available as a credit in the next payment period. We have retained Deferred Service Tax Input Credit to record any deferrals. Finally, Service Tax Payable now will have the adjusted and actual payable for a particular period. Service Tax Payable will be updated through Tax Adjustment similar to VAT/CST. Complete list of Chart of Accounts, related to Service Tax is shown below.
Reverse Charge: We’ve enhanced the recording of Bill where a reverse charge applies besides the accounting of RCM as described above. The way you configure reverse charge will be the same i.e. through Product and Services. For illustration, let’s do the following steps.
- Create a Service called ‘Security Services’ with reverse charge (to you the Service Recipient) of 75%
- Create the supplier called ‘Pegasus Security’ who provides security services for your company.
- Now, let’s create a bill based on the Invoice you received from Pegasus.
As you can see above, the reverse charge on the bill for the service provider is adjusted based on what you setup as the reverse charge (for the recipient) for that service. QBO also shows the tax you owe due to reverse charge in this bill. Tax Center: Service Tax agency in Tax Center will look consistent with VAT/CST as shown below. It will include the following actions for the Tax workflow – Tax Computation > Tax Adjustment > Run Reports > Record Payment in addition to view/modify the tax agency rates & settings.
In the example shown above, the Service Tax balance for October is shown. This is based on the transactions for the period before any adjustments that may be needed. ST Payable balance reflects the actual Service Tax Payable account balance which is typically updated through Tax adjustment and reset through Record (Tax) Payment. Payment Frequency: Given that Service Tax (& VAT/CST) can have different payment and filing frequency depending on the nature of the business, region or location, we have introduced payment frequency as part of all indirect tax agencies (i.e. for VAT, CST and Service Tax) to allow the user to configure based on their need.
As shown above, for this company, Payment frequency is configured as monthly. You can set the payment frequency either during the initial Tax Setup or by clicking on Rates & Settings > <tax agency> Settings. Service Tax Computation: Consistent with the VAT computation report, the Service Tax computation report will show all the Tax payable items (Output), potential credits (Input). As shown below, Output will include Reverse Charge payable for this period and the Input will include any deferred service tax and reverse charge credits (if any) from the previous period. Please note that these calculations are based on transactions for the period to give you an idea of Out / In taxes and will not change based on tax adjustments.
Service Tax Adjustment: In the August release Tax Adjustment will lead to a plain Journal Entry for you to make an adjustment but in the upcoming release, we plan to provide a guided approach for adjustment.
It will include 2 options. Option 1 will assume you will do the adjustment offline in a spreadsheet and enter the adjustments such as Input credit utilized, write-off and deferred credit (if any) manually into QBO. Option 2 will let you use QBO to guide you through the adjustment. In this option, the list of (service tax) bills for the period will be presented for you to choose the adjustment. By default, all the service tax paid will be utilized.
You can override this marking some of the bills as ‘write-off’ due to clerical errors (alternatively, you can also edit the actual bill and remove the Service tax portion). You can also mark certain bills as ‘defer’ that will move it to ‘Deferred Service Tax Input Credit’ account for future consideration. The workflow will also allow you to choose which reverse charge credit (from the previous period) is eligible (this is the default) and which ones are not eligible. Service Tax Reports: Run Reports, as usual, will allow you to run all the relevant reports for the tax agency.
As shown above, for Service Tax we have included Sales/Purchase Summary/Detail report. Abatement and Reverse charges are shown in separate reports. Tax Prep Report will help in Tax filing and includes all the Sales & purchase transactions with all the details for the given period. This is similar to the tax prep report for VAT/CST.
TDS As you may have experienced, QBO India has comprehensive support for Tax Deductible at Source (TDS) to account for TDS deduction for your supplier and record your TDS Payable. We have further enhanced TDS to support use cases such as High, Low rate and Advance payment. The high rate will be supported in the August 2015 release. Support for a low rate and advance payment will come later in the year. QBO assumes TDS high rate if TDS applies to a Supplier and the PAN is not entered as shown below.
Subsequently, when a bill is created and the cumulative amount is beyond the threshold, the high rate applies as shown
In case you inadvertently missed out on entering PAN for a registered supplier, you can always update the supplier detail with PAN and QBO will start taking the correct deduction from the next bill. Schedule VI: As you may have experienced, QBO India supports Schedule VI (actually Schedule III per the current MCA Companies Act, 2013) but there were some gaps in the drill down views. We have now corrected it and have made other improvements.
- Schedule VI drill-down view
For both Balance Sheet (as shown above), and Statement of Profit and Loss, the top level is fully compliant as per the MCA guideline. First Level drill down: For the first level drill down where there is a schedule (i.e. balance in accounts), QBO will now show the total of all the detail type accounts mapped to the schedule level item as per the MCA guideline. E.g. the first level drill down of Short-term borrowing will show the total of each of the detail type accounts – Loan Payable, Line of Credit, Short Term Borrowings from related parties and Credit Card. Similarly for Accounts Receivable, the first level drill down will include Account Receivable (Debtors) and Allowance for bad debts.
Second level to the next level drill downs: If the schedule has a name mapping (Customer, Supplier) then it will be first grouped by account names tied to the detail type and second grouped by name mapped and finally drill down to the transaction or bill level. Ex. Accounts Payable, Accounts Receivable (as shown below)
If the schedule doesn’t have a name ‘mapping’, it will be grouped by account names and then finally drill down to transactions or Journal Entries. E.g. Share Capital.
- Note Numbers
As noticed in the above screen shots, QBO also automatically generates note numbers for each schedule. The same note number is carried forward to the first level drill down and subsequent drill downs for reference. This is also carried forward to the excel export.
- Current and Previous Period
As noticed in the balance sheet screen shot, the schedule VI report includes both current and previous period as on <today’s date> or whichever period is selected. Integrated Payroll & QBO Apps Eco system For more information on Integrated Payroll, check out our earlier blog at https://quickbooks.intuit.com/in/resourcesquickbooks-blogs/integrated-payroll/ Also, checkout the Apps link (see below) in the QBO left navigation bar to checkout other exciting apps available for our India customers.
If you want to build apps for the QBO ecosystem or want to integrate with QBO, please visit https://developer.intuit.com/