In Business Central you can reconcile your VAT entries against the chart of accounts using the VAT statement. This matters because manual postings can cause your VAT accounts and your open VAT entries to drift apart.
To do the reconciliation, open the chart of accounts and find your VAT accounts (sales VAT, acquisition VAT and purchase VAT). Then open the VAT statement and use the Preview function on the Process tab. The preview totals the amounts per combination of VAT product posting group and VAT business posting group.
Compare the totals from the preview with the balances on your VAT accounts. The sales amount should match the sales VAT account, the acquisition tax should match the acquisition VAT account, and the purchase amount should match the purchase VAT account. If they match, your VAT entries are reconciled.
Why reconcile VAT entries in Business Central
Because Business Central lets you make manual postings, the amounts on your VAT accounts in the chart of accounts can end up out of step with your open VAT entries. Reconciling them confirms that the two sides agree, so you can trust the figures before you report VAT.
The check is simple: the total on your open VAT entries should equal the balance shown on the corresponding VAT accounts in the chart of accounts.
Finding the VAT accounts in the chart of accounts
Start in the chart of accounts. Search for “VAT” to filter the list quickly. You will typically see a sales VAT account, an acquisition VAT account and a purchase VAT account. These are the balances you want to match against your open VAT entries.
Using the VAT statement to preview the totals
Open the VAT statement. On the Process tab, choose to preview the statement. The preview totals the VAT amounts grouped by the combination of VAT product posting group and VAT business posting group.
This gives you the totals you need to compare directly against the individual VAT accounts in the chart of accounts.
Comparing the figures
Run through each account and check that it matches:
- Sales VAT: the preview total should equal the balance on your sales VAT account.
- Acquisition VAT: the acquisition tax total should equal the balance on your acquisition VAT account.
- Purchase VAT: the purchase amount total should equal the balance on your purchase VAT account.
When all three match, the total of your open VAT entries lines up with the amounts in the chart of accounts, and your VAT is reconciled.
Q&A
Why can VAT entries get out of sync with the chart of accounts in Business Central?
Because Business Central allows manual postings, the balances on your VAT accounts can drift away from the amounts on your open VAT entries. Reconciling them confirms the two sides still agree.
How do you reconcile VAT entries in Business Central?
Find your VAT accounts in the chart of accounts, then open the VAT statement and use the Preview function on the Process tab. Compare the totals from the preview with the balances on the VAT accounts.
How does the VAT statement preview group the amounts?
The preview totals the VAT amounts by the combination of VAT product posting group and VAT business posting group.
Which VAT accounts should match the VAT statement totals?
The sales VAT account should match the sales amount, the acquisition VAT account should match the acquisition tax, and the purchase VAT account should match the purchase amount.