In order to avoid ITC reversal because of any discrepancies in data reported by supplier and receiver, it is very important for you to carefully match the data reported by your suppliers with your own purchase documents. Matching is also very important to ensure that you don't miss any ITC claim.
Depending on the nature of business, the number of purchase documents can be anything from few to thousands or even more. Even in a single document, there are many details like Place of Supply, Date, Reverse Charge applicability, Total Value etc. All these details have to be examined carefully so that any incorrect data reporting can be avoided.
As the number of purchase document increases, it becomes infeasible to manually compare all these details. That's why Octa GST provides auto-matching functionality, which can compare thousands of documents with-in seconds and presents the results so that you can take appropriate actions on any differences.
IMPORTANT: Auto-matching and reconciliation needs both GSTR-2A data on GST Portal and Purchase data. Without entering both, it is not possible to match & reconcile. Please refer how to add GSTR-2A data and how to add purchase data before continuing.
To match the purchase data with GSTR-2A data received from GST Portal, simply:
Open the GSTR-2A page
Select the reconciliation period:
Month: This will show the reconciliation of transactions in selected month only.
Financial Year: This will show the reconciliation of transactions in whole financial year.
Full: This will show the reconciliation of all purchase transactions.
Click Match & Reconcile button
Octa GST will automatically match the purchase documents and show the results. Depending on the details, there are five possible match results:
Match: Purchase data matches with data reported by your supplier.
Almost Match: Purchase data matches with data reported by your supplier but there are minor differences. By default, a difference of less than or equal to one rupee is considered as minor difference but this limit can be configured by you. These type of differences normally occur in case of rounding issues in different accounting softwares.
Mismatch: Purchase data does not match with data reported by your supplier. This means there are important differences which should not be ignored.
Unknown: Reported by supplier but not found in your purchase data. This means either you have missed this invoice/document in your purchase data or supplier has incorrectly reported that invoice/document.
Missing: Present in your purchase data but it is not reported by your supplier. This normally means either your supplier has not filed his GSTR-1 return or missed this invoice/document in his return. It is very important to report these invoices/documents to your supplier so that you don't miss the ITC on these documents.
Note: When the background colour of above symbols is shown as grey, the meaning of match result is same but it indicates that your supplier has reported that invoice/document but has not filed his return.
Octa GST supports bulk actions so that you can reconcile a large number of documents in few clicks only. At the same time, it provides fine controls so that you can analyse individual documents if needed and take appropriate actions. This design puts you in control without compromising the productivity.
When you start the reconciliation, Octa GST will first show the supplier-wise summary. This screen may be used to decide that which supplier you need to focus on. The tax difference meter will show the amount of difference in a graphical manner. So in one simple glance, you will know the suppliers for which there is a large difference in aggregate tax amount. You can double click on any supplier to view the reconciliation screen. If you wish to reconcile all the suppliers in one go, you may click on All Suppliers button.
Depending on the match result, you can take appropriate actions on each purchase document.
Accept: This action means you agree with the data reported by your supplier.
Reject: This action indicates you don't agree with the data reported by supplier.
No Action: This action indicates you would like to reconcile this invoice/document later.
Export Mismatch Report
Once the reconciliation is done, you can click on Mismatch Report button to export the data to an Excel file. You can also click on Excel button to export the mismatch report for an individual supplier.
Continue reading: Octa GST Guide