• Home /
• VAT Margin Scheme /
• Advanced Setup Guide

Advanced Setup Guide¶

This article fully covers the setup you should do for both VAT Margin Scheme by Codadot and Business Central.

First things first¶

VAT Margin Scheme relies on inventory costing. This means that you should record costs for the stock you acquire. It doesn't matter when or how you post the costs to the General Ledger, as we use the Value Entries for determining the purchase price, but you should have amounts in the Value Entries. Additionally, you should use specific costing, which in turn makes it mandatory to use item tracking to track stock movements on the serial number level.

Setting up the posting groups¶

1. Navigate to the VAT Product Posting Groups page and create a new group (e.g. MARGIN HIGH) with an appropriate description.
2. Then, navigate to the VAT Posting Setup and create a new combination for each VAT Business Posting group that will exist in conjunction with the newly created VAT Product Posting Group.
3. Specify a VAT identifier. This identifier should be unique for margin VAT, as Business Central merges VAT amounts by the VAT identifier. An example would be MARGIN H.
4. Click the checkbox in the column Margin Calculation. All lines with the same VAT identifier will be synchronized to the same value.

Setting up VAT clauses¶

Most countries require you to put a special statement on the invoice. You can do so by using VAT Clauses.

1. Navigate to the page VAT Clauses and add a new clause. An example code could be MARGIN.
2. Add the required text to the clause.
3. Navigate to the VAT Posting Setup and select the newly created clause when focused in the appropriate combination of posting groups.

Selecting the type of margin scheme¶

In general, there are two major margin schemes:

• Globalization
• Individualization

These margin schemes differ in how negative margin (in other words, you lose money selling the item) can be compensated. Please read the descriptions of each scheme below and consult your accountant or head of finance to identify which scheme you should use. By law, companies can only use one scheme and thus you can only set up one scheme on the setup page of Codadot VAT Margin Scheme.

Globalization¶

The globalization method allows you to compensate profit (= positive margin) with loss (= negative margin) when selling items under the VAT margin scheme. Codadot VAT Margin Scheme implements this by allowing you to post both positive and negative VAT entries upon posting, which in the end, when creating your VAT statements, results in the allowed compensation.

Individualization¶

The individualization method does not allow you to compensate profits with losses, which means that, if you lose money on selling an item under the VAT margin scheme, you can't claim back any VAT. Codadot VAT Margin Scheme will post a zero VAT entry, allowing you to identify quickly which VAT entries resulted from selling an item at loss. Upon creating your VAT statements, this method won't allow for compensating profits with losses.

Serial number overrides¶

If you sell items under the VAT Margin Scheme, chances are that you will be selling serial numbers that would fall under the margin scheme and serial numbers that wouldn't fall under the margin scheme, even if the item would be the same. Thus, Codadot VAT Margin Scheme allows you to override the VAT Product Posting Group for a specific serial number.

If this scenario sounds like a plausible scenario, please follow the following steps:

1. Navigate to the Codadot VAT Margin Scheme Setup page using the search function.
2. Under the FastTab VAT Product Posting Group Override, toggle the setting Enable VAT Override

This setting has the following consequences:

• First, you can only invoice or credit items in singular quantities if you select a serial number that contains an overridden VAT product posting group.
  Otherwise, you'd be able to sell two items where only one should be overridden.
• Second, if you start posting item receipts, whether via the item ledger or via purchase/sales documents, the system will always create a Serial No. Information-record.
  These records need to be made so you can enter an override when necessary.

Serial No. Information¶

You can find the list of all serial numbers in your system by navigating to the Serial No. Information List. You can find this page using the search function. Codadot VAT Margin Scheme has added some columns to this overview to increase the user experience when managing serial numbers.

If you open a record for a specific serial number, you'll notice that the fields Item No., Variant Code and Serial No. are editable. This is standard Business Central functionality. However, if you define a VAT Product Posting Group override here under the FastTab Posting - VAT Margin Scheme, you probably want to ensure that users can't change the references to the actual serial number that's in your inventory.

To prevent this from happening, you should enable the feature Prevent Change Item Reference.

1. Navigate to the VAT Margin Scheme Setup - Codadot page.
2. Under the FastTab Consistency, toggle the feature Prevent Change Item Reference.

Additional features¶

The built-in serial number card doesn not contain any useful links to sales or purchase history. Codadot VAT Margin Scheme includes a feature that allows you to enrich this page with the sales/purchase history for a given serial number. To enable this, follow the following steps:

1. Navigate to the VAT Margin Scheme Setup - Codadot page.
2. Under the FastTab History, toggle the feature Enable SN History Information.

If you now open a Serial No. Information card, you'll see two new FastTabs with respectively the serial number's purchase history and it's sales history.

Reports¶

If you work a lot with serial numbers, you probably want to print serial numbers on every sales document that you send out to customers. VAT Margin Scheme includes a feature to accomplish this very easily.

There are two ways to add serial numbers to reports.

1. Add serial number to the description
   This method allows you to easily add the serial number to reports without altering your existing reports.
2. Add serial number to the report dataset This method fills a new field in the report dataset that you can use in your RDLC or Word lay-outs.

To enable this feature, please follow the following steps:

1. Navigate to the VAT Margin Scheme Setup - Codadot page.
2. Under the FastTab Reports, toggle the feature Print Serial Numbers.
3. Select which way you want to use using the Method option.

All set!¶

That's it. You've fully configured VAT Margin Scheme by Codadot. You can now start using the extension.