Instructions

About Parolla VAT Report Generator

This web application is part of a larger Payroll / Xero integration for the Irish market. Parolla and Ogilvie Consulting Ltd use this tool in the generation of our VAT 3 returns. If you would like to see the tool expanded with greater functionality then please contact us at Parolla, or email/text/call Mark Ogilvie at +353 89 221 9326.

Recommended Xero Setup

The VAT Report generator uses your pre-existing Sales Tax Rates from within Xero.

If not set already, you should create sales and purchase tax rates for each tax band in each country that you are doing business. Use a zero rate for the EU country.

Instructions
  1. The button at the top of this page will direct you to the Xero login screen where you will be authenticated with Xero.
  2. Xero will then ask you to give permission for Parolla to access your Xero data. Choose the organisation that you wish to run the reports for and confirm access.
  3. You will be redirected back to the Parolla report select details page.
  4. Enter your email address.
  5. Confirm your method of calculating sales transactions, cash basis or accruals.
  6. Choose your VAT reporting frequency.
  7. Choose the date range that the report should cover. Note that the start date and end dates are inclusive. So set the end date as the last day of the chosen period.
  8. Select any taxes that are Goods EU VAT taxes.
  9. Select any taxes that are Services EU VAT taxes.
  10. Click Submit to run the report.
  11. Download the ROS inline XML file if required.
  12. Click Reset Company to chose a different company or to reset your API connection.
Cash, Accrual, or Hybrid Methods

You choose the basis for both sales and purchase transactions. This can be used to check if the generator is working correctly for your organisation. Compare the generator in both Sales and Accrual methods against the Xero Sales Report before deciding if you will run the generator in Hybrid mode.

Note that you should not directly compare common Tax Rates such as "No Tax" or "Tax Exempt", or any other Tax Rate which is used in both sales invoices and purchase bills. This is because the Tax Rate gross and nett values generated in the Xero Sales Report will be a mixture of sales and purchase transactions calculated by using the same method. Either accrual or cash basis method.

The VAT3 generator however, will contain some transactions where the sales are calculated via cash method, while the purchases are calculated via accrual method. This will result in a different total value when compared against the Xero Sales Report values.

Tax Code Warnings

You can check your transactions for possible errors in their selected vat rate types.

For instance, if an invoice line item has been coded as a purchase tax type then you will see an error triangle in the details tab. Hover over the icon to get an explanation of the possible error.

To make use of this feature you should set your tax rates up as follows:

  1. Go to your Xero tax rate settings sceen under Settings > General Settings > Tax Rates
  2. Select a tax rate to edit.
  3. Make sure you only have one Tax Component in the tax rate.
  4. For a sales tax, include the word 'sale' or 'sales' in the tax component name.
  5. For a purchases tax, include the word 'purchase' or 'purchases' in the tax component name.
  6. Words can be any combination of upper or lower case.
  7. If the component name contains both words, or neither, then the tax code will be take as bi-directional.

Disclaimer

Disclaimer

Use this tool at your own risk.

This VAT Report Generator was created to assist parolla.ie with preparing their VAT 3 returns in Xero. It does not take the place of professional advice or claim to produce the correct outputs for your business.

We recommend running the tool on a selection of past return periods and comparing the results with your current method of calculation. The tool doesn't write any data to Xero so you cannot damage anything.

Known Limitations
  1. Manual journal entries are not currently accounted for. We're working to integrate these. If your date range contains a manual entry you will be notified with a warning.
  2. Pay runs have not been incorporated as they do not attract VAT. Note that user expenses claims and payments to benefit providers are still accounted for.
  3. The Xero API places limits on the number of transactions in any 60 second and 24 hours period. If you have more than 30 Expense Claims to process in a tax period then the generator has been programmed to slow down to handle one claim every 2 seconds and keep under the Xero API limits.
  4. For security the API connection period is limited to 30 minutes by Xero. This means that sometimes the generator will abort on long runs due to permission errors. This has no effect on your data in Xero. Simply renew your connection and re-run the report.
To Do List

There are some features that could be created to make this tool more helpful. We're open to feedback at Parolla and will try to incorporate suggestions. The priorities at the moment, in descending order, are:

  1. Export information by email We never required an email interface as the system was running on our own servers. We will write an email module so that PDF reports can be sent to the provided email address. If you need record documentation immediately then simply print the pages from your web browser.
  2. Export information in Excel.
  3. Produce end of year returns.
  4. Create a button to setup tax rates in Xero.
  5. Look at VIES or MOSS output.
  6. Look at RCT versions.