Q. Why is the VAT on my invoice calculating incorrectly?
A. How VAT calculations are rounded may impact the total VAT amount.
When calculating VAT on an invoice, there are 2 calculation methods that can be set up in the CONFIGURATION > Accounting page. This is typically configured as part of the initial account configuration, and once set cannot be updated. Missing or incomplete customer information can also affect VAT calculations. If a customer’s address or VAT number is not provided, the system defaults to "No VAT," as it cannot determine the appropriate VAT regime without these details.
The 2 options available are:
Calculate VAT on invoice total. Sum all charge lines and VAT is applied to the total of all charges.
Sum VAT per charge line. VAT is calculated and rounded to 2 Decimals on each individual charge line.
Which option to select may be determined based on the accounting package used, as the rounding may impact matching how they calculate. Once configured reach out to the Qargo Account Manager for any changes. If you are getting any type of "errors" while posting invoices, please contact our support team via chatbox. To prevent VAT-related errors, always ensure customer address and VAT number details are completed before creating orders. Regularly review rate card settings to confirm VAT configurations align with applicable tax regimes, and consider conducting periodic audits to identify and correct discrepancies early.
Reach out to your Qargo Account Manager if updates are required to configuration.
Causes of VAT-Related Errors
Automated VAT (tax type / VAT%) is determined using a “most specific data wins” approach, with the order’s countries driving the decision, and manual overrides taking precedence.
What inputs are used (in order of preference)
Goods origin & goods destination countries (if filled in)
For container import/export scenarios, the system uses country of origin and country of destination (of the goods), instead of pickup/delivery.
Otherwise: pickup & delivery countries on the order
Used when goods origin/destination are not provided.
Customer (or subcontractor) country
The country is derived by first trying the VAT number, then falling back to the billing location.
Steps to Correct VAT Errors
Add Missing Customer Information:
Navigate to the customer's record in Qargo and ensure their address and VAT number are filled in.
If the issue exists in an existing order, edit the order directly and manually update the VAT on each order line where needed.
Adjust Rate Card Settings:
Identify the rate card settings linked to the affected charge.
Update the VAT configuration in the rate card to apply 0% VAT if the job or charge qualifies for VAT exemption.
Manually Set VAT on Specific Charges:
Open the relevant order and locate the charge with incorrect VAT.
Disable the "Set VAT automatically" option.
Manually set the VAT to the correct percentage or 0%, as required.
Best Practices to Prevent VAT Errors
Proactively Fill in Customer Details: Always ensure the customer’s address and VAT number are completed before creating an order. This helps the system automatically apply the correct VAT.
Verify Rate Card Configurations: Regularly review rate card settings to confirm that VAT configurations align with the tax regimes applicable to your operations. Misconfigured rate cards are a common source of errors.
Conduct Periodic Audits: Implement routine checks on invoices and orders to identify discrepancies in VAT application early, enabling prompt corrections.
Auto determination happens when creating the order or when changing the customer (and similarly when selecting a subcontractor).
It does not automatically recalculate if pickup/delivery is changed afterward.