Reconciliation of turnover with VAT returns

This document explains how to reconcile the annual turnover with VAT returns in Switzerland, in order to identify and correct any discrepancies before or during an audit.
The content is intended for trustees, accountants, and users of Banana Accounting who need to prepare or verify a VAT reconciliation within the Swiss context.

The reconciliation of turnover with VAT returns is an accounting process that allows you to verify that the data reported in VAT declarations corresponds to the company’s accounting records.

In the context of Banana Accounting, the turnover refers to the total of the sales amounts recorded in the revenue accounts, net of VAT, as it is automatically deducted by the software.

Checks before Turnover and VAT Reconciliation

At the end of the year, one of the calculations requested by the auditor is the annual reconciliation between the turnover declared in the VAT reports and the turnover resulting from the accounting.

Before checking the reconciliation of turnover with VAT reports, the following checks must be carried out:

Check VAT on Sales and Purchases:
With Banana Accounting, you can regenerate the VAT report facsimile for a quarter even after some time and compare it with the one that was submitted.

You can therefore:

• Calculate the VAT due on sales made and compare it with the amount reported in the VAT declaration.
• Calculate the deductible VAT on purchases and compare it with the amount reported in the VAT declaration.

Alternatively, it is possible to create the facsimile of the annual VAT form in order to compare it with the totals of the amounts declared in the VAT forms for the four quarters. If there are any differences, it is necessary to identify in which quarter they were generated and proceed with the corrections.

Reconcile Turnover with the VAT Declaration

In Switzerland, in the VAT form submitted to the FTA, the following are reported for each period (quarter or semester): turnover, VAT due, VAT recoverable, and VAT payable.

Therefore, to determine any differences between the amount of annual turnover declared and that present in the accounting (Accounts table), we recommend using an Excel spreadsheet, where the following data are listed in separate columns:

• Turnover of each quarter resulting from the accounting. To make it easier to determine the turnover for the quarter, run the Accounting Report with quarterly breakdown, and check the group that totals the gross revenue accounts.
• Recalculated VAT due for each quarter using the VAT Summary function or the VAT Extension.
• Add a column "Turnover differences" to calculate the differences between the declared turnover and the accounting turnover.
• Add a column "VAT differences" to calculate the difference between the declared VAT amount and the recalculated one.

Analyze the Discrepancies:
If differences emerge in the comparison, you need to:

• Identify and analyze the causes that led to any differences in the turnover and/or VAT reporting.
• Correct any errors and send the correction form to the FTA.
• In the VAT reconciliation document, justify each discrepancy amount. In this case, it is useful to also include the entries where errors were made or those that caused the discrepancies (e.g. entries without a VAT code).

Below is an example of a very simple template to identify any discrepancies. Everyone is free to manage the spreadsheet according to their own preferences.

Main causes of discrepancies in turnover