Tax section

VAT rate, Small Business Regulations, Numbering

Written by Dennis

Updated 9 months ago

Here, you'll find everything you need to set up your tax settings and adjust tax rates, which is an essential aspect of running a business. Pay close attention as this is an important topic that can impact your business's financial health.

This function you can find here: General → Accounting

Step 1: Fill in the VAT ID and Tax Number

VAT ID is a specific identification number assigned to businesses or individuals engaged in the supply of goods or services subject to Value Added Tax (VAT). This number helps tax authorities track and identify businesses for VAT purposes. In some countries, the VAT ID is also known as the VAT Registration Number or VATIN.

Tax Number, also known as a Taxpayer Identification Number (TIN), is a unique identifier assigned to individuals or businesses by tax authorities to track and manage their tax-related obligations. This number is used for various tax purposes, not just for VAT.

Step 2: Small Business Regulations

Regulations for small businesses exist in almost all countries around the world. However, the specific nature and extent of these regulations can vary significantly from one country to another. Different countries have their own legal systems, economic policies, and approaches to business regulation.

Before activating small business regulations, please recheck this topic specifically for your country or contact your tax advisor! 💙

Step 3. VAT Rate:

If your Small Business Regulations are deactivated, you'll move on to adjusting tax rates. Different products or services may be subject to different tax rates based on the applicable laws.

At this link, you'll discover a list of VAT rates for various countries: Global VAT Rates 2023. Please check this once again or ask your tax adviser.

It's essential to configure the correct tax rates for each product or service your business offers to avoid undercharging or overcharging customers.

Please note that after you have specified VAT rates, you must indicate the required tax under each of your product. See the guide here.

Step 4: Numbering

Numbering format for order numbers and invoice numbers is a system used by businesses to generate unique identifiers for their sales orders and invoices. These identifiers help keep track of transactions, improve organization, and facilitate communication between the company and its customers.

1. Format for Order Numbers:

The format for order numbers typically includes a combination of letters, numbers, or symbols that make the identifier unique to each order. In the example provided, the placeholder "[number]" is used, which will be automatically replaced by an incrementing number. For instance, if the starting number is 1000, the first order number will be "ABC-1000," the second order will be "ABC-1001," the third order will be "ABC-1002," and so on.

Using a standardized format like this ensures that each order number is distinct and helps avoid duplicate numbers that could lead to confusion or errors in the sales process.

2. Format for Invoice Numbers:

Similar to order numbers, the format for invoice numbers also comprises a combination of characters, often including a company code or name. The placeholder "[number]" is used here as well, and it is replaced by an incrementing number for each new invoice. For example, if the starting number is 1300, the first invoice number will be "ABC-1300," the second invoice will be "ABC-1301," the third invoice will be "ABC-1302," and so forth.

The purpose of the invoice numbering system is to uniquely identify each invoice issued by the company. This sequential numbering allows for easy tracking of payments, accounting reconciliation, and customer communication.

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