Tuesday, September 24, 2019

VAT REFUND WILL NO LONGER BE A PROBLEM

Enfotek continues its activities to solve the problems. Enfotek pressed the button for VAT refund, which has been on the agenda for years and has caused the Financial Advisors to work hard. VAT refund, which is the figure that exporting companies will receive from the state, is no longer a problem. Engineers of Enfotek, a 100% domestic and national software company, developed the Enfotek VAT Return Module. Accordingly, the program ignores the human error in VAT returns and calculates the amounts with computer technology.

IT WILL BE THE FIRST IN TURKEY

Tuncay Demirel, Enfotek Accounting Team Leader, made statements on the subject. Stating that Enfotek VAT Refund Module is a first in Turkey, Demirel said: “The chaos in VAT refunds will end with the module developed by Enfotek. While the program will save time for Financial Advisors, it will also minimize the margin of error.” Demirel said, "The module provides an Excel report in a one-to-one format ready to be uploaded to the Revenue Administration's (RA) system". “The VAT field loaded in the report shows by calculating the VAT of the material on the purchase invoice used for export. In addition, how much VAT was used on which invoice, and how much VAT remains. This eliminates repeated invoices or over-usage warnings from the RA system.”

NO EXTRA LOAD

Tuncay Demirel, who also gave information about the operation of the module, said: “The program creates the requirement records of an exported product by using the product tree, connects the purchases made according to the requirement records to the order, transfers both the export invoice of the order and the purchase invoice to the accounting module, and calculates exactly how much VAT is used from which purchase invoice item for which export item, as it should be. Since all invoice information is available in the system, it creates the Uploaded VAT List 100% correctly. And thus, it does not leave any extra work for the user.”

On the other hand, we also received the opinions of Independent Accountant and Financial Advisor Ramadan Efecik about VAT refund.

How are VAT refund reports currently prepared in the textile industry?

The most important of the VAT Return reports is the Uploaded VAT List, which determines our receivables from the government. I have not seen a program that systematically makes this report over the computer system. Our second report is; VAT List to Download. Almost all accounting programs and ERPs can make this report. Because this report is a very basic report. It is a report that lists the VAT, invoice information and types of goods of all invoices entered that month. All programs can give this 99% accurate. However, there is no system that can make the report I mentioned first. It's a very tedious job. It first requires a costing over individual BOMs, and after that, the invoices that form the basis of the cost need to be determined one by one and associated with a report.

How much VAT refund can we talk about for a medium-sized apparel company?

Assuming the labor is about 15-20 percent, and the remaining 75-80 percent is the cost, it's like 8 percent of that for a job that costs 100 thousand dollars. In other words, if we convert it to TL, a figure like 48 thousand TL emerges for 600 thousand TL. Of course, this calculation is valid for expenditures made with 8 percent. For 18 percent underwriting, the figure goes even higher.

This receivable needs to be calculated correctly, right?

Yes, it should be calculated correctly. It is also important that it should be calculated quickly. Because it is an issue that concerns the cash flow of companies, so it is of vital importance.

That is, we are talking about a cash flow advantage or disadvantage for the business activities of the firm. What are the risks in case of making a mistake in such a difficult job, what are the problems if the VAT return report is incorrect?

When you make a mistake, you risk getting the VAT refund both incomplete and too late. Every mistake you make means 1 week-10 days. The scale is huge for the report we are talking about. In a company that exports 8-10 items and exports different products, the picture becomes very broad. If we ask why, you go down as far as the product tree, because there are hundreds of materials. If there are 20 materials for a product in the bill of materials, you need to find out which invoice contains the entries for those 20 products one by one. You need to find this and match these invoices correctly, and then follow their balances correctly in re-use. Because the state cares and controls it. You used 10 TL VAT from an invoice, it was 20 TL VAT, you wanted to use 15 TL for your next request, the system tells you -5 TL. It says 10 TL I can give you from here. Your return request is already in a job queue in the system. It takes 2-3 months for the payment to come out, if you do the calculation in 3 months, the payment will reach you in 6 months.

In other words, you take the report back completely because you misrepresented it, and you correct that report again.

Definitely. You have to do everything from scratch.

So, do you have such customers? Are you or they preparing the VAT return reports?

Yes there is and we are preparing jointly. In other words, they make certain parts of the reports, and we do certain parts. Then the reports are uploaded to the IOP system in the form of Excel files. Of course, giving Excel reports in the right format is an important issue. The system makes various inquiries. It makes inquiries from the invoice number to whether that company has issued such an invoice, to tax numbers. Especially in e-invoice and e-archive, the system sees this directly.

That's a huge workload overall.

The biggest workload for exporting companies.

In that case, the VAT Refund Module that Enfotek will put into practice to solve this problem will revolutionize. Due to the fact that the accounting system is ERP, it will prepare a VAT return report by scanning all historical data and automatically associating it with the product tree, finding the invoice links of an exported product and calculating the VAT usage. This will provide great convenience to both Financial Advisors and Accountants and exporting companies.

It certainly will.