Set-up advice: Multi-currency, VAT and banking reconciliation

I’m currently in the process of looking for new accounting software, so moving over to an ERP system seems like it could be a good long-term option. The main ‘push’ factor is that to support multiple VAT registrations (e.g. UK, DE, FR) I’ve been needing to keep a separate set of books for each, which then makes banking reconciliation quite difficult. Currently I pull sales data into a MySQL database, determine the VAT place of supply, then via API: upload the sales to accounting software, then ‘pay’ the invoices, then pull down paid PDF invoices to send to customers.

I’m trying to find out whether the following are possible with Tryton and if so, how it would be best achieved and whether custom modules would be needed?

  • EUR base currency as the company is based in the Eurozone
  • Sales in EUR with VAT due to various countries, and also sales in GBP with VAT due to HMRC (and possibly Ireland depending on distance sales in the future)
  • Some supplies in USD with reverse charge VAT attributed to EUR accounts
  • Multiple invoice prefixes according to VAT ‘place of supply’ (e.g. DE invoices would start DE, FR with FR, GB with UK)
  • Automated determination of VAT ‘place of supply’ (e.g. Item sent from German warehouse to a German customer with an address in Germany would have German VAT, but rules are more complicated when cross-border transactions take place)

I think the following are the possible options:

  • one set of accounts with sub-accounts, as long as the original currency amounts can be pulled out for reporting (e.g. to allow the correct amount of VAT to be paid to HMRC)
  • two separate sets of accounts (one in EUR and one in GBP) with currency conversions defined at certain points (e.g. end of year, or when a VAT return is due)
  • one set of accounts for each VAT registration (in that country’s currency)

The two key factors here are that VAT reporting is correct (and can be customised to the requirements of different countries) and that banking reconciliation is possible. Nearly all the software I’ve looked at can’t handle these two things simultaneously; multiple VAT can usually only be handled by treating each registration as a separate entity, and bank accounts can’t be shared between entities.

I’m also looking at how stock can be managed in future with inventory moving between warehouses in different countries, so it effectively needs an automatic ‘sale’ from one VAT registration to another when the warehouse stock moves between countries. This should be able to give an instantaneous ‘value’ of the inventory by using the FIFO method.

Hi Barry,

Welcome to our community. Most of the features you are looking for are suported by tryton but after reading your post I have some doubts

For how many companies you will do accounting? For a single one or for more than one (in diferent countries)? In which country are your companies located?

It’s just one company based in Malta. The difficulty has been most other software can’t handle multiple VAT registrations so has required each registration to be accounted in a separate set of books (so effectively like having multiple separate companies all sharing two bank accounts - EUR and GBP). We currently have VAT registrations in MT and GB with inventory stored in GB. There is a plan to expand into DE, FR, IT, ES, PL and CZ in the medium term by using Amazon’s warehouses and that will trigger wider VAT registration requirements.

Having multiple VAT registration should not be a problem for Tryton but it will require some customization to automate the selection of the proper VAT identifier on each invoice.

Applying taxes based on the warehouse country and customer delivery address is also supported with the Account Tax Rule Country module. But it will require that you fully configure all the rules.

Reverse charge VAT should also be possible by creating the proper tax definition.

Having different invoice number per VAT identifier is not supported in base but it should not be difficult to customize it as we have a generic pattern matching of sequence currently based on company, fiscal year and period. So added a country code will not be difficult.

This is not supported. I think you have to explain what is the purpose.

Thanks for your answers! This seems to be very close to what I’ve been looking for.

Multiple sets of accounts (e.g. EUR and GBP) were needed for other software that could only support single VAT registrations, but as Tryton can support multiple this should not be a problem.

Is it possible to create reports using the secondary currencies? (e.g GBP transactions with EUR base)

Tryton stores accouting using company currency but for each move in foreig currency it also stores the amount and currency. This information can be used to create your custom reports ambout secondary currencies.