Finding the partner in life that is your perfect match can be a major factor in how your life plays out. With your perfect match, even the hurdles and setbacks faced during life can be overcome. However, if you end up with a mismatch then even daily life becomes arduous. Similarly, when reconciling your invoices, a perfect match between your invoices and those of your supplier will ensure both of you receive your input tax credit(ITC), which is due. However, if any mismatches occur, then further steps need to be taken to reconcile the invoices and ensure the corrections are made. Some of the most common errors faced during GST reconciliation include mismatches in invoices, purchase register, credit notes, etc.
To file GSTR2reconciliation of invoices must be carried out to compare the invoices submitted by both supplier and purchaser. GSTR 2 contains the details of inward supply, while GSTR 2A is related to supplies recorded by the supplier , that is auto-populated on the GST portal, when the supplier files his GSTR1. Reconciliation under GST ensures Input Tax Credit (ITC) can be availed. If mismatches are found, the process of correcting it can be time consuming, as vendors will need to be contacted to create new invoices with the changes needed.
Contacting the vendors for a few mistakes would, generally, not be time consuming, however, as is the case with most businesses, there are thousands of invoices that need to be reconciled.
Some of the most common errors encountered during reconciliation are:
The information captured in GSTR-2A and the details recorded by the supplier in his/her (GSTR-1) can have mismatches. If the number of the invoices containing errors are low in number, then you can simply call your vendor to resolve the errors from either your side or his/her side.
For example: if as per your records the invoice is dated Feb 24th yet the supplier captured the data for Mar 3rd, when he received the goods.
Another common mismatch error is due to invoice numbers. This occurs usually because either a suffix or prefix was added to the invoice number.
While, these errors are easily fixable, if the number of invoices with errors is high in number, then the process of reviewing each one to determine the errors can become tedious.
Credit Note Errors
These errors usually occur because the purchaser of the goods, did not record the credit note amount separately. For example: Anil sold goods worth Rs 100 and issued Rs. 10 in credit note for a defective product to Raj. Raj records it as a sale of Rs. 90 in his GSTR2, while Anil records the invoice value as Rs.100, thus causing the mismatch.
There are some errors which cannot be edited/changed and the only course of action available is to reject the mismatch brought to your notice and make a new entry in your GSTR2 or accept the error reflected in your GSTR2. The non-modifiable errors are:
Anytime a mismatch is brought to your attention, you can contact the supplier/vendor to edit his/her invoice or you change your invoice to reflect the information entered by your supplier/vendor. However, this method can be time consuming.
As a preventive measure you can record all the invoice details in an excel sheet and correct any mistakes before reconciling your invoices and avoiding the mismatches. Again, this can be a tedious task if you generate invoices in high volume. An easy solution is to take the help of experts who have the tools and manpower to take care of your reconciliation.
The GST experts at H&R Block India, will ensure your invoices match those of your vendors and if any mismatches are found, rectify them. GST Reconciliation with earlyGST at H&R Block India, is an easily affordable solution that will save your valuable time, which you can devote to growing your business.