Reconciling Sales Register with GSTR-1
In order to avoid any discrepancies in sales data and data reported in GSTR-1, it is very important for you to carefully match the data reported by you in GSTR-1 with your own sales documents before filing the annual return.
Depending on the nature of business, the number of sales transactions can be anything from few to thousands or even more. Even in a single document, there are many details like customer GSTIN, place of dupply, reverse charge applicability, tax amounts etc. All these details have to be examined carefully so that any incorrect data reporting can be avoided.
As the number of sales document increases, it becomes infeasible to manually compare all these details. That's why Octa GST provides auto-matching and reconciliation functionality, which can compare thousands of documents with-in seconds and presents the results so that you can take appropriate actions on any differences.
# Add Sales & GSTR-1 Data
In order to do matching and reconciliation of GSTR-1 data with sales register, naturally the first step is to add both sales and GSTR-1 data to Octa GST. If you haven't done it yet, please refer below articles for same:
Auto-matching and reconciliation needs both GSTR-1 and Sales data. Without entering both, it is not possible to match & reconcile them. Please refer how to add GSTR-1 data and how to add sales data before continuing.
# Matching Configuration
To match the sales data with GSTR-1 data, simply:
- Open the GSTR-1 page
- Click on Reconcile button
This will open a matching/reconciliation configuration page:
You can select the following parameters related to reconciliation
|GSTIN||Your business GSTIN which you would like to reconcile|
|Period||The period you would like to reconcile. You can select month, quarter, financial year, or even any other custom period. The records in your sales data that belong to this period, will be selected for reconciliation.|
|Ignore Difference||Octa GST shows the matching status of documents (explained below). This parameter specifies the difference up to which should be considered as insignificant. If the differece is below this parameter, Octa GST will show Almost Matching status. If the difference is more than this parameter, Octa GST will show Not Matching status.|
|Basic Linking||Specifies whether to use Basic Linking algorithm for linking invoices. Basic linking is explained below.|
|Smart Linking||Specifies whether to use Smart Linking algorithm for linking invoices. Smart linking is explained below.|
The period in which you book your sales transaction in your books, may be diffrent from the period in which you reported it in GSTR-1 (may be some invoice was missed and it was added in later period). This is a common scenario and Octa GST takes care of this by always looking for related documents in all periods. This works automatically and there is no configuration required for that.
# Basic Linking
Basic linking algorithm uses the following parameters to link the related documents in sales and GSTR-1 data:
- Document Type
- Document Number
- Financial Year
If basic linking is selected, Octa GST will link all such documents for which above parameters match exactly.
# Smart Linking
If the data quality of both sales and GSTR-21 data is very high, then basic linking should be able to successfully link related documents in sales and GSTR-1 data. But in practice, it is common to have mistakes in document numbers.
To address this common issue, Octa GST used Smart Linking algorithm which matches the related documents based on the similarity of data in sales and GSTR-1. The following parameters are used to calculate a similarity score:
- Document Number
- Document Date
- Taxable Value
- Tax Amounts
If this similarity score is high, Octa GST will link such documents automatically. This saves a lot of time and effort which would otherwise have been spent in manually linking the invoices.
When you start the reconciliation, Octa GST will first show the overall and period-wise summary. This screen may be used to decide that which sections and periods you need to focus on. The green/red indicators in the period summary will show the periods in which there is difference in sales and GSTR-1 values. So in one simple glance, you will know the periods in which there is a significant difference in aggregate tax amount. You can double click on any section or period to view the reconciliation screen.
Octa GST will automatically match the sales documents and show the results. Depending on the details, there are five possible match results:
Match: Sales data matches with GSTR-1.
Almost Match: Sales data matches with data in GSTR-1 but there are minor differences. By default, a difference of less than or equal to one rupee is considered as minor difference but this limit can be configured by you.
Mismatch: Sales data does not match with data in GSTR-1. This means there are important differences which should not be ignored.
Missing in Sales: Exists in GSTR-1 but not found in your sales data.
Missing in GSTR-1: Present in your sales data but it is not reported in GSTR-1.
When the background colour of a row is grey, it means the document has been amended in later periods.
# Exporting Mismatch Report
Once the reconciliation is done, you can click on Mismatch Report button to export the data to an Excel file.