I would like to request you to please give ur suggestion/advise in the below issue:-
In our earlier legacy system(oracle) we used make provision entry based upon the activity done & certified by respective non finance dept by(against which vendor invoices are not received before month closing):-
On the last day of the month:-
Handling Exp Dr
Ware House Exp Dr
Other many Exp Dr
Current Liab & Prov A/c Cr
As per IT dept we have to deduct TDS at the time of crediting the vendor or any other suspense a/c and deposit it by next month by 7th day . To avoid non deduction of TDS against such provisional expenses we used to reverse the same entry on the 1st of next month:-
Current Liab & Prov A/c Dr
Handling Exp Cr
Ware House Exp Cr
Other Exp Cr
Now in SAP we r not doing manual entries like above:-
The entries are huge and so many Exp get debited & GR/IR A/c get credited. Thus there is a very much possibility that the IT person or IT Auditor treat it(GR/IR) as suspense a/c and can give comments on his report about non deduction/deposition of TDS.
In SAP there is an option to transfer all these credit open items into an clearing a/c and reverse it in the 1st of next month. But that time entry will be a sunder:-
On the last date of the month
GR/IR Account Dr
C/L Prov Clearing A/c Cr (It will be created)
On the first date of the month
C/L Prov Clearing A/c Dr
GR/IR Account Cr
But again C/L Prov Clearing A/c can be interpreted as a supense A/c.
We need entries like under:-
On the last date of the month let all credit open item of GR/IR as it is.
On the first date of the next month all Credit Line items document to be reversed and again reposting of same on the same day.
I,e all Exp to be credited
All GR/IR to be debited
(Revarsal of all open GR/IR credit line items) on 1st of next month
On same day again the original entries which are reversed to be created
All Exp to be deited
All GR/Ir to be credited.
Whether above is possible, if not then how other companies in India are handling the issue.