How MYOB Can Be Used To Prepare VAT Reports

Before you can take advantage of how MYOB made it easier (at least, easier than manually doing it) for you to prepare your VAT Reports, you must first comply on how to implement VAT in your business. MYOB follows strict adherence to the generally accepted accounting principles. There are no exceptions. For that reason, at the very first occurrence of a business transaction, everything should run perfectly.

The following are the significant steps that you should observe when accounting for transactions subject to VAT.
  1. Your manual procedure in handling transactions and documents that require VAT should be generally accepted, legal and ethical. If it is not, MYOB will not be able to handle your transaction completely as you wish. In manual accounting, every thing is easy to manipulate; but not with MYOB. MYOB makes sure that debit equals credit and that 1 + 1 = 2.
  2. MYOB maintains a table of tax codes and rates. You need to enter the correct VAT rate.
  3. You have to identify which of your products, purchases, and services are subject to VAT. You can set this up beforehand so that you do not tend to forget to calculate the VAT. You can actually set the VAT plug for each vendor and customer. It is like, tick Yes if the vendor is VAT registered.
  4. For each invoice, billing, and disbursement you prepare in MYOB, the VAT should be calculated unless the transaction is not subject to VAT. If the invoice or billing statement shows a mix of VAT and non-VAT items or transactions, you can actually specify which is which in MYOB.
  5. If you are doing every thing right and consistent, then there will be no problem printing the VAT report.

What is the VAT Report?

The VAT Report prints out the input VAT and output VAT transactions. Look at the bottom figures of the two reports. Any difference is what you remit or return to the Bureau of Internal Revenue. You can look at this report as the Summary of Alphalist of Withholding Agents.

This report is what you attach to your VAT Return. The report lists the customers and vendors that were subjected to VAT, their addresses, TIN, VATable amount, and the VAT. Unfortunately...

Exceptions, Exclusions, and Misfortunes

  • Unfortunately, the VAT report does not show the VAT registration number. There is a workaround, though. You can use the other fields to accept the VAT numbers.
  • BIR requires a certain format. The VAT report generated by MYOB is not exactly how it should look as required by BIR. Therefore, you need to export the report to Excel so that you can customize it to make it look exactly like the Summary of Alphalist of Withholding Agents.
  • BIR recently required that receipts and invoices should disclose the summary of VAT and non-VAT transactions. This requires modifying the MYOB software itself. Unfortunately, only the MYOB developers can do that. So, you just have to wait for a new release of MYOB if ever MYOB would accommodate such changes. Meanwhile, you can use your hand to write the missing figures after you have printed out the receipt or invoice.
  • If a withholding agent collected VAT from you, you need to secure a Certificate of Creditable VAT Withheld at Source (BIR Form No. 2307) from the agent. Not every company would have the time to issue one for you especially if the VAT amount is small. Therefore, you have to decide, at the point of entry, would you account for VAT as VAT, or account it as part of the cost?