Sale Audit… How to Audit the Sales Order and Sales invoices ?

Audit of Accounts Receivables ( Debtors )

 

In our journey of making our Sale audit better and more effectively done earlier we have discussed about –

What important points to be check while auditing ? when you are –

1.Taking New Sales Order – https://mlgassociates.in/if-you-are-doing-your-sales-order-audit-correctly  (Click and Read)

2.Creating New Customer – https://mlgassociates.in/new-customer-creation(Click and Read)

Today’s Topic gonna be New HSC/SAC Code and Gate Out Record

HSC/SAC Code

 

If your HSC code is wrong then it will create troubles for you.

If your industry have 8 digit HSC code and you entered 6 digits this will create troubles and if you have 6 digit code and you make the code by prefixing/suffixing it with 00,01 & 10 this will again creates trouble to you.

SOP should be followed.

Talk and consult with your Consultants about sales or purchase item’s new or already entered wrong codes and improve things as much as possible.

 

Gate Out Record

 

If just invoice making is sufficient for recording material to be out from your place ?

What is the proof of Material gets out of your sites main gate after making invoice ?

You should check this. Also check whether your ERP has a feature Like finsys- main exe.-F2, Web Finsys -Scaning feature that who let the material to be out from gate and at what time and also from which transport?

 Get Out gives you control of seeing with proof that when the material gets off from your site.

For more such points which are important for your internal audit will gonna be discussed soon, just stay tuned.

For more information and clarity watch the video below by – Mr. Sangeet Kumar Gupta, F.C.A and Co-founder of Finsys .

 

Video Shot at Jaipur Marriot

 

What are the good things you must see during audit of the Sales Side. Debtors, Prices, Sale order and so many things.. Practical Ideas.

Audit of Accounts Receivables ( Debtors )

is a Good thing to do

What to Check in Sales Order?

 

 

We usually assume that if invoice is generated by system it has more reliability. That’s why sale audit is mostly done just for taxation.

But

—Here are some questions for you—

1️⃣

Have you checked your Sale order’s price?

2️⃣

Have you checked that the price of invoice is according to the discussed, agreed and final price?

3️⃣

If effective date is correct or not ? –

(For more clarity like – the price was effective from 1st April and you started the invoicing of price changed and you get order on 10th April and you changed the price in your ERP on 15th April.

So..as per the things price gets changed from 15th April, if the debit notes were made for the dates from 1st to 15th April or if credit notes have to be issued-issued or not ?)

 

Who is Responsible and Accountable for all this?

You have to understand that it’s also an important area for Audit.

 

There are some important areas of Sale audit.

 

Today we gonna discuss about one of them which is –

 

New Sales Order

 

Here is the checklist you should be checking-

Which Sale order is new in this month? – It can be either fresh or amended orders.

What is the position of the orders? – If in literal we got the order or it’s just party has asked for the quotation on mail.

We should ask or cross-check with the management that – If we get the price increase in any order in this month according to our assumption or not?

After checking the Sale order given by management you should check whether the already rate entered in your ERP are correct or not?

Check the Sale order physically or either make demand for it. As there is a possibility if you doesn’t have your customer’s P.O (Purchase Order) and you changed the price, this will not be considered as increase in price.

If taxes deducted are ok or not or are according to discussion or correct or not ?

      Effective Date is correct or not ?-Is there any Retrospective increase or decrease?

E-invoice should be made or not ? as its mandatory for the organization over 5 Crore turnover.

These all points should be covered while you are going to have your Sales Audit.

 

–> Next time will talk about our next important area of Sale Audit which is – ‘New Customer Creation’<–

 

Stay tuned for more such informative content and see the video below by – Mr. Sangeet Kumar Gupta, F.C.A and Co-founder of Finsys for further information and more clarity .

 

 

Also read about the recent event he attended by the link given below:

https://mlgassociates.in/world-forum-of-accountants

 

We are Proud to share that we are Attending WOFA – New Delhi 2025.

WOFA is World Forum of Accountants … See you there

 

We at MLGA are attending WOFA

 

 

Wondering What WOFA is ?

Just stay in touch with us to get more knowledge, Information like this and also get expert in these kinda terms.

So, basically WOFA is…

A global gathering of accountants and finance professionals organized by the Institute of Chartered Accountants of India (ICAI). The 2025 WOFA will take place at Yashobhoomi, New Delhi from January 31 to February 2, 2025. The theme for the 2025 WOFA is “Accountability Meets Innovation (AI): For A Sustainable Planet”.

 

What’s its endeavour  ?

The World Forum of Accountants (WOFA) will delve into the critical intersection of artificial intelligence (AI) and environmental sustainability. The forum will explore AI’s transformative potential to address global environmental challenges, such as climate change, pollution, and resource scarcity. By examining AI-driven solutions, WOFA aims to inspire innovative approaches to environmental management and conservation.

For more information and to register yourself click the link below. https://wofa.icai.org/

Proud to attend this three day international conference

E Circular from I am SME of India

This circular was authored by Mr Sangeet Kr Gupta , our Co Founder… This was dated 23-12-2024, for the GST Council meeting dt 21-12-24

Some Recommendations of the 55th Meeting of the GST Council ( As relevant to our IamSMEof India members)

ECircular -55th GST Council Meeting dt 21-12-2024  (click here)

Click the link above to see / Download the Circular

Published for the internal usage for the members and clients of M/s.  Finsys Infotech Limited and M/s. MLG Associates

E-circular dated 22-12-2024

Integrated Association of Micro, Small & Medium Enterprises of India

www.iamsmeofindia.com

E-mail: info@iamsmeofindia.com, +91-9711123111 (Executive Secretary)

Rajive Chawla Chairman, IamSMEofIndia

Sangeet Kr Gupta Hon. Consultant, IamSMEofIndia

Dear Members,

Some Recommendations of the 55th Meeting of the GST Council ( As relevant to our members )

Note : Detailed notifications are yet to be released. The above is based on the Press Release dt 22-12-24. The meanings may change, after the actual Circulars / Notifications are released

Now in Detail… first for Sale of Used Cars

To bring supply of the sponsorship services provided by the body corporates under Forward

Charge Mechanism.

GST Council recommends no GST on transaction of vouchers as they are neither supply of goods nor supply of services.

The provisions related to vouchers is also being simplified. GST Council clarifies that no GST is payable on ‘penal charges’ levied and collected by banks and NBFCs from borrowers for non-compliance with loan terms

GST on Old and Used Vehicles

Old Position

Smaller Vehicles	12% on the Gain portion only
Larger Vehicles	18% on the Gain portion only

Cess taken at Zero

New position

All Passenger Vehicles , all types

18% on the Gain portion only

Benefit : No confusion to MSME himself, and no confusion to the Government

Note

1. This GST is on the Gain portion only
2. Gain means : Margin of the Supplier, that is, the difference between the Purchase price, less Depreciation and Selling price, ( That is logical )
3. And an unregistered person, say a Salaried person = Not applicable at all
4. Cess again remains zero

 

Source for old position : Notification 8/2018 dt 25-1-2018 – Central Tax (Rate )

Meaning : Law is same for all now

		If Sold Below WDV	If sold above WDV
Size of Vehicles..4000 mm, 3000 mm.	Any Size	No GST applicable	Yes, GST on “profit portion” only
Sports SUV or non SUV	Anything	No GST applicable	Yes, GST on “profit portion” only
Ground Clearance Rules…170mm	Anything	No GST applicable	Yes, GST on “profit portion” only
Engine Capacity… 1200cc…1500cc..1600cc	Anything	No GST applicable	Yes, GST on “profit portion” only
All Size of Vehicles All Size of Vehicles All Size of Vehicles		Same Rate, Same Rules

Category		GST ?
Normal employees, without registration in GST		No GST
Normal Residents, without registration in GST		No GST
Doctors , or any exempt category		No GST
Sale of old Motorcycle by any user ( salaried or business, except Auto dealers themselves )		No GST
Any Regd person selling a old car at a loss	Usually Motor Vehicles are sold at a Loss only	No GST
Any Regd Person, selling an old Car at Profit over WDV	This is very rare… that Income tax depreciation is 15%.. and actual value reduction is less than this	Yes, GST on the Gain portion only

Calculation examples

Car	Purchase Cost	Written down value after 15% annual income tax Depreciation	Sold for	Gain or Loss Value	GST
A	20,00,000	14,00,000	13,99,000	(1,000)	Nil
B	20,00,000	14,00,000	10,00,000	(4,00,000)	Nil
C	20,00,000	14,00,000	18,00,000	4,00,000	18% on 4 lakh	But looks very rare
D	20,00,000	5,00,000	4,99,000	(1,000)	Nil
E	20,00,000	5,00,000	4,00,000	(1,00,000)	Nil
F	20,00,000	5,00,000	7,50,000	2,50,000	18% on 2.5 lakh	But usually rare, since cars have a limited life of 10/15 years now

Note : Detailed notifications are yet to be released

No GST on the Penal Charges by Banks, and NBFC’s

GST 55^th council meeting , agreed and clarified that no GST is payable on the ‘penal charges’ levied and collected by banks and NBFCs, from borrowers for non-compliance with loan terms.

This is good

This used to be a PAIN

Already some penal charge levied

And on the top of it its GST….. Now no more

The council has agreed.. that the essence of this is of “Interest”, hence probably GST council smiled and let this go.

Note : Detailed notifications are yet to be released

Ease of Doing Service by the Associations : in GST

Topic	Current Position	New Position
Sponsorship considered	Reverse Charge GST only	Forward Charge GST if done by Corporates ( example Section 8 company )
Loss of GST	The Service provider Association cannot take ITC input of GST on its input services…. and leads to loss , Need to absorb that GST as loss / Cost	No such loss in future
Doubling of GST	Yes, Double GST, first paid to vendors of the association by the association, then Again, as RCM by the Sponsor to the Govt.	This Double loss is removed

In Short, the Government is Making Business Better

For queries, suggestions and feedback , you can e-mail us 

Sangeet Kumar Gupta, FCA, DISA, ACMA, PGDMM, B.Com(Hons), Honorary Consultant, Integrated Association of Micro Small and Medium Enterprises of India, 93126-08426, Camp Off : TB-06, 3^rd Floor, Crown Plaza, Sector-15A, Faridabad, Haryana 121007   skgupta[at]finsys.in. I am SME of India Office … Plot No.135, Sector 59, Industrial Estate Phase-II, Ballabhgarh, Faridabad- 121004, Haryana.

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Please send your details, and request e-mail to info@iamsmeofindia.com  / skgupta[at]finsys.in

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Notes & disclaimer

The contents of this circular are for Private circulation & intended for the addressee/s only. We do not warrant that this email is free of mistakes, errors or any other defect. Care has been taken to provide authentic information, but it is advisable to confirm/verify with qualified legal practitioners, professionals before implementing any suggestions. The views expressed are not necessarily those of the Association. We encourage readers, our Members to write to us their opinions, suggestions, ideas, comments, thoughts and bring to our knowledge mistakes, omissions etc. which we’d be pleased to correct/implement.

For personalised suggestions, and solutions, contact our I am SME of India Team and Consultants

Regular Monthly Stock Audit Facilities from Finsys ERP Team

How will you know the correct material accountability,

 if your stock is inaccurate and haywire ?

The “Surprise” “Friendly” Stock Audit helps energise your team

That yes, Keeping Stock Correct is important

It is mandatory for GST, Income tax, Bank and yourself

It helps in Better ERP implementation too.

Excellent Web Based ERP Software Facilities from Finsys ERP Team

https://www.iamsmeofindia.com/