For the majority of the world, VAT has been a factor of doing business for as long as can be remembered and the processes and procedures long since ingrained into day to day life and work. Where a completely new form of VAT is introduced to an environment, multiple challenges are thrown up not simply related to the cost of the VAT itself but to how it will be collected and paid and how will it impact your business. Keep reading to explore the best way to manage and simplify construction VAT.
Fortunately, Construction Software such as CCS Candy and CCS BuildSmart was designed and developed by Construction professionals exclusively and specifically for the Building and Construction industry and was done so in environments where every conceivable kind of tax and regulatory requirement were already in place. Rest assured, all the potential pit falls were faced and tackled along the journey to the current version of the software
Accounts Software Integration
Your ‘accounts’ are your official ledger of turnover, profit and loss and all financial activity of the business. Your Construction Software needs to know how to deal with elements such as VAT and to be able to feed and read information from your accounts department in all financial aspect. Allowing for off-setting of pad and collected tariffs and factoring these into variations and over-runs is a potential nightmare scenario for construction professionals. Managing and adapting to maintain margin is crucial and your construction software should be helping immeasurably with this.
The market leading packages will also ensure that the VAT implications of your agile adjustments don’t result in a mismatch in VAT liability. This means preventing lost margin through inaccurate reporting and thus avoiding the double whammy of being hit with a fine for transgressing the VAT policy and framework. Therefore, you must:
- ensure that your books of accounts are updated with accurate information
- Start recording all your financial transactions in a VAT compliant way
- Choose a VAT software which will make your life easy
VAT Returns and Tax Credit
Within the VAT framework, you will by now be charging VAT on your supply of taxable goods and services. You will also need to be monitoring and recording the amount of VAT you have paid to other suppliers for goods and services in support of your work. This allows you to claim back a credit against the VAT you have collected (under the premise that the VAT liability should fall upon the end user or buyer rather than being charged multiple times along the way).
In an ideal world, the intention of VAT is that the amount (15% in SA; 5% in the UAE) is only charged once and the logical place for it to be applied would be at the likely highest cost point, the very end. In reality, this is something of a utopian ideal and very accurate and detailed transactional level reporting is required to be able to claim back as much or all of the additional VAT cost incurred en route. Your construction software will help you with this by ensuring all elements of the projects, individually and as a whole, can be reported on, in exact and finely drilled detail. As the software has been in place with major market leading construction outfits for decades, the intricacies and nuances of this process are already running smoothly and available for your use.
Software that adapts with you to comply with VAT
It is imperative you ensure that your Construction software adapts to your needs and the complexities of your business and is VAT compliant.
Take the opportunity to review your processes, practices and procedures and, of course, your pricing but let CCS Candy and CCS BuildSmart take care of the heavy lifting without disrupting your routine activities.
CCS Candy and CCS BuildSmart were developed by and for the construction Industry with decades of real time experience across the Globe in Multiple Tax Environments. Speak to the team and explore what these market leading construction software solutions can deliver to your business.