In some countries, you must declare tax on a prepayment. For example, if you prepay a supplier and if the supplier subsequently does not ship goods or provide services within a certain time period, the supplier must issue a tax invoice.

The AP Prepayment Tax Reconciliation process lets you add reconciliation key identifiers to link prepayments, tax invoices, and final invoices, and then perform reconciliations.

For a detailed description of AP Prepayment Tax Reconciliation, see QAD Financials User Guide.

Eastern European countries

In some countries, you must declare tax on a prepayment. For example, if you receive a prepayment from a customer and do not ship goods or provide services within a certain time period, you must issue a tax invoice.

The AR Prepayment Tax Reconciliation process lets you add reconciliation key identifiers to link prepayments, tax invoices, and final invoices, and then perform reconciliations.

For a detailed description of AR Prepayment Tax Reconciliation, see QAD Financials User Guide.

Eastern European countries

Electronic bank payments require bank-specific files or drivers for each financial institution. These files must be customized for individual banks in each country, and must be selectable for individual customer and supplier payments.

Use Bank File Format Import (31.23) to import pre-defined bank format XML files for use with electronic bank payments. Each imported format file is specific to an individual bank and contains the payment information and attributes required for that bank. Once the file is imported, a payment format with the same name is displayed in Payment Format Maintenance. You can then link this format to the bank account you intend to use for electronic payments.

To import the bank driver you require for use with your system, contact your local QAD Services team

All

European Union (EU) regulations require member nations to submit reports concerning Intra-EU trade. The term Intrastat (for Intra-EU Trade Statistics Reporting) refers to the system used by customs officials to monitor this trade.

Intrastat functionality is fully supported in QAD Applications. You can use the Intrastat functions to:

For details on Intrastat setup and maintenance, see QAD Intrastat User Guide.

All EU Member States.

Declarant forms are available for the following countries:

Austria

Belgium

Denmark

France

Germany

Ireland

Italy

Luxembourg

Netherlands

Poland

Spain

United Kingdom

Company names must not be abbreviated when displayed in Legal Documents. The field length for address names must therefore be sufficient to allow any company name to be displayed in full.

Customer, Supplier, and Company name, address, and contact details are defined using Business Relation Create (36.1.4.3.1). These details are used in financial reports and documents such as sales orders and invoices. The Business Relation function lets you define a code, Name (up to 36 characters), Search name, Second Name (up to 36 characters), and Third Name (up to 60 characters). Define a second or third name if required for your legal documents and reports.

For a description of Business Relation setup and implementation, see QAD Financials User Guide.

Argentina

Brazil

Chile

China

Japan

Mexico

Poland

Russia

Thailand

Venezuela

Mirror accounting is used to ensure that inventory transactions are reflected immediately in the income statement, as well as in the balance sheet. It is used to analyze purchases and inventory movement in the GL in financial reports.

Mirror Accounting is fully supported in QAD Enterprise Edition. The function is used only for inventory control transactions, such as PO Receipts, WO receipts, inventory movements, and SO shipments. You use mirror accounting to link a set of source (balance sheet) accounts to a set of mirror (income statement) accounts. When inventory transactions are posted, the source accounts are adjusted, and a simultaneous mirror posting is generated which updates the mirror accounts.

For a description of mirror accounting setup and implementation, see QAD Financials User Guide.

Belgium

France

Luxembourg

Poland

Switzerland

Italy

 

Financial regulations in certain countries dictate that GL transactions must be identified by number in a sequence without gaps. The sequence number of a transaction appears in statutory transaction reports. The sequence numbers can be applied when the transactions are posted, or applied period by period during Year-End Closing. These numbers can be reset on a yearly basis, and two or more business units within a corporation can use the same numbering sequence.

The auditor may also require that some transactions from the prior year be represented in one of the current year’s reporting periods.

It must also be possible to enter an additional description line for GL transactions that are numbered in this way.

The Entity program has an additional GL numbering feature, which ensures that the system generates a sequential number for all statutory GL postings. Use the Additional GL Numbering tab in Entity Create to enforce a secondary numbering sequence for GL transactions.

Note: Reversal postings do not have this numbering.

You can enter a Secondary Description in daybooks for transactions that will be numbered in this way. This ensures that the description is detailed in the GL Numbering report.

The GL Numbering report (36.1.99) lists all transactions booked over the specified time frame. The pages in the GL Numbering report are numbered progressively for the whole year.

For a description of Additional GL Numbering setup and implementation, see QAD Financials User Guide.

China, Italy

A number of tax reports are required for Intra-Community (IC) transaction reporting.

 

The system provides the following generic regional tax reports:

These reports also include payment discounts.

Belgium

Germany

Netherlands

Poland

Switzerland

When implementing VAT on sales and purchases within the EU, most goods and services provided to business customers are now treated as being supplied in the country where the business customer is established, instead of on that of the supplier. This requires reverse tax charges for customers on supplier invoices, and a zero tax rate for suppliers on customer invoices. These tax amounts must be detailed in Quarterly IC Declaration reports.

You use Tax Rate Maintenance (29.4.1) to set up the customer reverse tax rates and supplier zero tax rates required to implement these changes.

The Quarterly IC Declaration by Business Relation (29.6.2.3) and Quarterly IC Declaration Transactions (29.6.2.4) tax reports display IC declaration data totalled per business relation and country, and by transactions respectively.

Both reports can be filtered for tax type, tax box, or tax group, which lets you display the VAT tax amounts generated by customer and by tax rate.

For more information on tax rate maintenance, see QAD Global Tax Management User Guide.

All EU states

Tax registers, which group together tax-related accounting transactions, are a legal requirement in many European countries. You must be able to print separate tax register reports for Purchasing and Sales (AP and AR) in a prescribed format every month-end and on demand for fiscal authorities.

Tax Register Create (29.1.17.1) lets you group daybooks for tax register reporting purposes and generates a sequence number that will be used to number pages in final tax register reports. Tax registers contain all relevant information to confirm the tax declaration of the company.

You can report on the tax registers using the following regional reports:

AP Tax Register Details (29.6.3.11)

EU Purchases Tax Register (29.6.3.12)

EU Sales Linked to EU Purchases (29.6.3.14)

AR Tax Register Details (29.6.3.16)

Suspended Tax Register (29.6.3.18)

There is a legal requirement in Italy to print different descriptions for the same EU tax register in the EU Purchases Tax Register and EU Sales Linked to EU Purchases reports. To comply with this requirement, in Tax Register Create, use the Alternate Description field to specify a different description to display in the EU Sales Linked to EU Purchases report.

For information on Tax Registers, see QAD Global Tax Management User Guide.

Europe

It must be possible to associate tax registers with all sites or a specific site and to share number ranges among tax registers.

Each separate tax register can have its own range of transaction numbers. It must be possible for all tax registers to share the same range of invoice numbers.

You can use the Invoice Numbering function to enforce chronological and sequential invoice and credit note numbering. This checking feature is set at domain level and is an option on the Domain master record.

Create AP and AR daybook sets to define default daybooks for AR and AP transactions.

Use Daybook Set by Site Maintenance (25.8.10) to define site-specific default sets of daybooks that are used for recording invoices, credit notes, intercompany transactions, and, when used, for correction invoices.

When configuring daybook sets by site, you can define daybooks for one site or for many. When you then create tax registers, you can include all daybooks or specific daybooks in the register, thereby reporting on individual or multiple sites. Transaction numbering includes the daybook reference, and the number range of transactions in registers derives from the daybooks selected.

For more information on daybook maintenance, see QAD Financials User Guide. For information on Tax Registers, see QAD Global Tax Management User Guide.

Italy

Poland

In some countries it is required that either Tax ID Federal or Tax ID States and sometimes both are validated according to local legal requirements for length, format, and code validation.

QAD application component code is based on a standard code template. Non-intrusive customization is the process of adding customized code before or after the standard code, without intruding on the standard code itself.

You use non-intrusive customization techniques on the BFormatSet component to validate the following fields:

• Federal Tax ID field in the Business Relation record

• State Tax ID field in the Business Relation record

• Federal Tax ID field in the Supplier record

• State Tax ID field in the Supplier record

• Federal Tax ID field in the Customer record

• State Tax ID field in the Customer record

For more information on implementing non-intrusive customization, see QAD System Administration User Guide.

Brazil

Chile

Colombia

Venezuela

In some countries, you are required to withhold a certain percentage of the tax due on payments to various suppliers. These are typically sole traders who supply services rather than goods.

You can use the Global Tax Management withholding tax features to facilitate the collection of withholding tax.

Separate GL accounts are used for booking retained withholding tax amounts. The withholding tax liability is not created until an invoice that is subject to withholding tax is paid. At that point, withholding tax is retained from the total invoice amount and is credited to this separate account. If a partial payment is made, the system calculates the withholding tax liability based on the proportion of the invoice that is being paid.

The withholding tax account is then debited with the retained amount once the withholding tax is declared to the authorities. This is normally recorded using a manually entered GL transaction.

For more information on withholding tax, see QAD Global Tax Management User Guide.

Argentina

Brazil

Italy

Thailand

US

Venezuela

Global IFRS and local GAAP requirements in some countries require functional and local currencies for reporting purposes (dual currencies).

The Statutory Currency is the second base currency in the Financials system. The statutory currency is set at domain level, and is inherited by the entities assigned to the domains, and is optional.

In some countries, the use of the statutory currency can be limited to a few reports, such as tax and basic GL reports. However, in other countries, companies can be required to submit many reports in the local statutory currency, for example, balance sheet, income statement, daybooks, general ledger, sub-ledgers, and tax declaration reports. To meet these requirements, you can run all GL, AR, AP, and tax reports to display output in statutory currency. However, statutory currency is not available for GL Report Writer reports.

The system uses a dedicated statutory exchange rate when converting transaction amounts to and from the statutory currency. However, you can choose to use the normal accounting exchange rate for statutory currency calculation. All GL transactions contain statutory currency amount fields on the same level as the base currency amount fields, including tax transactions.

The system also features an inventory exchange rate, which is optionally used for inventory, purchase order, scheduled order receipt, and work order transactions to convert between the statutory currency and base currency.

You can revaluate transactions in transaction currency, relative to the statutory currency. The Currency tab of GL Account Create contains account settings for transaction currency revaluation in statutory currency. For information on system currencies, see QAD Financials User Guide.

All

Some European countries have the following legal requirements regarding exchange rates:

You can specify at entity level which date the system must use when retrieving the exchange rates for accounts receivable and accounts payable transactions. To use this facility, you must add the Retrieve AR Exchange Rate Using and Retrieve AP Exchange Rate Using fields to the entity record using design mode.

For accounts receivable, you can choose to retrieve the exchange rate based on the posting date or on the tax point date. The setting applies for invoices posted from sales orders and for invoices created manually in Customer Invoice Create (27.1.1.1).

For accounts payable, you can choose to retrieve the exchange rate based on the posting date or on the invoice date. In Supplier Invoice Create (28.1.1.1), you can add the following three fields using design mode:

You can edit the statutory currency invoice amount to record the exact invoice amount in statutory currency from the supplier’s invoice.

The grid on the Tax tab of Supplier Invoice Create contains fields that let you view information on the base and tax amounts for the base and statutory currencies.

For supplier prepayments in Open Item Adjustment Create, the system always retrieves the exchange rate based on the posting date, regardless of the setting of the Retrieve AP Exchange Rate Using field. For supplier adjustments in Open Item Adjustment Create, the system always retrieves the exchange rate based on the setting of the Retrieve AP Exchange Rate Using field on the entity.

For more information on advanced exchange rates, see QAD Financials User Guide. For more information on design mode, see QAD System Administration User Guide.

All Countries

A few countries have three decimals in their currencies; for example, the Jordanian dinar, the Tunisian dinar, and the Omani rial. The system needs to accurately process transactions in currencies with three decimals.

A few countries have currencies with three decimals; for example, the Jordanian dinar, the Tunisian dinar, and the Omani rial. The system correctly calculates and displays amounts expressed in currencies with three decimals from transaction creation to report generation. You can input amounts with three decimals in fields and view amounts accurately displayed in the forms, browses, and reports.

The limitations of currency-dependent rounding support are as follows:

 

The document layout for paper checks can vary from company to company within the same country, and also from country to country. It must be possible to customize check formats according to company or country requirements.

QAD Reporting Framework has a comprehensive toolset for customizing printed output. The default check print reports are Supplier Check Print (28.9.9.3) and Customer Check Print (27.6.8.1).

QAD Reporting Framework lets you modify the report layout, add and remove data fields, add calculation logic, or change sort order and grouping. You can also customize system-supplied report templates that contain formatting information such as fonts, logo, and paper orientation and length.

The built-in Report Wizard guides you step by step through the design process

For more information, see QAD Reporting Framework User Guide.

All

The Single Euro Payments Area (SEPA) is a payment-integration initiative of the European Union (EU) to simplify electronic bank transfers. Within SEPA, all euro payments are treated as domestic payments. From February 2014, all payments in SEPA must be of type SEPA.

Every electronic transaction within SEPA is assigned a SEPA reference. For customer payments, SEPA payment references are generated within the QAD system and saved as a unique identifier for each transaction.

For supplier invoices received, the supplier generates the SEPA payment reference and the AR clerk enters the reference in the system. The SEPA reference is then validated by the system.

The Payment Reference fields on customer and supplier screens enable you to use SEPA to allocate payments. SEPA references are also printed on financial reports such as Customer Invoice Print (27.1.1.4) and Supplier Remittance Print (28.9.9.8). The SEPA payment reference is also used for matching in Process Incoming Bank Files (31.1.6) and is integrated in the XML message of the outgoing supplier payment file.

When a customer or supplier bank account is set up to use the SEPA payment format, then any transaction must include a valid SEPA reference number. When SEPA messages are switched on at entity level, any deviation from SEPA format returns a warning message. These warning messages do not prevent you from proceeding.

For more information, see QAD Financials User Guide.

EU

Iceland

Liechtenstein

Monaco

Norway

Switzerland

The structure and layout of Balance Sheets and Income Statements can vary between countries. For example, a Balance Sheet for US accounting requirement is usually presented in portrait (vertical) format, with Assets, Liabilities, and Equity sections listed in sequence. However, Chinese accounting practices require the Balance Sheet to be in horizontal format, with separate columns for Assets and Liabilities/Equity. Chinese requirements also require row numbering, report and column titles, and sub-totalling.

Use the Regional Balance Sheet Report (25.15.5.8) and Regional Income Statement (25.15.5.9) to create structured reports in landscape (horizontal) format that can be customized for individual country requirements. You can select a range of COA elements to include in the reports. You can also generate regional reports based on a multi-level alternate COA structure as, for example, with Chinese Balance Sheets.

For more information on these reports, see QAD Financials User Guide.

All

The electronic data provided by the company as a source of information for tax auditing often relates to the Balance Sheet and Income Statement. In some countries, the legal Chart of Accounts (COA) can be different from the operational COA for business or legal reasons. A company that is part of a larger organization may be required to define an alternate COA according to local GAAP, and then report to their head office using the operational COA. An alternative chart of accounts is a secondary grouping of accounts that is generally used for statutory reporting.

The Alternate COA function provides the ability to generate reports using alternate COAs, in addition to a company’s operational COA. Alternate COAs can be used for reporting purposes only—you cannot post transactions to alternate accounts. Chinese accounting regional reports have the option to use an alternate COA.

For a description of this feature, see QAD Financials User Guide.

All

International companies often require multiple costing methods to calculate inventory costs and generate period reports. Standard costing is legally acceptable in some countries, while in others, the business or legal requirement is for the FIFO (first-in, first-out), weighted average (WAVG), or LIFO (last-in, first-out) costing method. These requirements can also be the subject of IFRS compliance.

Companies must also be able to report open WIP balances from period to period.

Periodic Costing (30.5) provides functions that support local requirements and business practices when companies revalue and recalculate inventory, transactions, and cost of goods sold. Periodic costing programs optionally calculate the FIFO, WAVG, or LIFO cost of an item based on recorded data, such as inventory transactions, BOMs, routings, purchase prices, and labor/burden expenses, over a certain user-defined period. The period can be any length, up to an entire GL period.

Periodic Costing features a range of period-based WIP reports, including work order WIP history, WIP adjustment valuation, and WIP scrap valuation.

Periodic costing is described in detail in QAD Periodic Costing User Guide.

Brazil

Italy

Turkey

Chile

South Africa

UK

In environments where high volumes of invoices are produced, an organization periodically generates bills to send to their customers.

The bills contain a consolidation of invoices, credit notes, and payments that have occurred since the previous billing. Customers make payments with reference to bills, rather than to individual invoices. Bills do not replace normal invoicing, which still takes place as usual.

The billing solution functionality exists formally in Japan and Thailand but it is useful in any situation where regular customer statements with a balance carried forward are needed.

Bills have their own due date, based on the billing date and specific terms for bills. Sales revenue and tax postings are posted during the invoice posting. However, billing enables you to group these invoices on a periodic basis in a formal bill document and send them to the customer. The bill document is an invitation to pay and its credit terms override those of the originating invoices. The original invoices remain open; the billing document is not a replacement AR. However, the billing document is to be paid as a single payment with a single payment reference. The bill also contains a balance carried forward.

The billing screens enable you to send bills to selected customers and record the payments that the customers make. The functionality consists of:

Billing is described in detail in QAD Financials User Guide.

Japan

Thailand