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B. Sales Verification & Sales Taxes Verification (STR VS Ledger)

1. What is Sales Verification?

Sales verification means checking that the total value of issued bills (after discounts) is properly recorded as income in accounts.

At the same time, the sales tax register’s net tax must also match with the tax recorded in accounts.

Since every issued bill is already recorded in the sales tax register, we can trust the register as the base. Matching account sales & taxes with the sales tax register ensures that both revenue and tax are correct.

⚠️ Important: Do not start this step until the first steps (entries clearance, user rights verification, inactive setup check) are completed.

2. Sales Data Flow & Cases

To begin verification:

  • Load the Sales Tax Register in Accounts.

  • Select the correct fiscal year you want to tally.

  • Remember, only Sales and Credit Note vouchers (booked from Sales Posting, Credit Note, or A/C Bill entry) should be part of the sales register.

👉 Many assume that the Sales Register income will always match with Trial Balance (Income Ledger) or P&L Net Income. But mismatches happen because of non-sales vouchers or wrong ledger postings.

That’s why we use the Ledger Reconcile Report in Accounts. This report helps track the flow of sales data and is the key tool for sales verification.

3. Common Mismatch Cases For Sales & Tax

  • Case 1: Non-SJV & CRN Voucher Entries
    Income ledger sometimes includes non-Sales Journal Vouchers (SJV) or extra Credit Note vouchers.
    These do not appear in the sales tax register, causing mismatches.

  • Case 2: Remaining Postings
    If Sales or Credit Notes are not posted, they will not appear in accounts, while they already exist in the sales register.

  • Case 3: Wrong Ledger Posting
    Sales should only be recorded in Income Ledgers.
    Sometimes, by mistake, sales are posted under Assets, Expenses, or Liabilities, which creates mismatches.

  • Case 4: Round-Off Issues
    Round-off should be very small (not more than ±0.5 normally).
    If round-off values are unexpectedly large, it may be due to technical errors or bugs. Always verify round-off figures against transaction size.

  • Case 5: VAT Bill & Credit Note Issues
    When issuing VAT bills for IRD approval and then adjusting them with credit notes:

    • Sometimes only the Credit Note is posted but not the Sales.

    • Or Sales is posted but not the Credit Note.

    • Or a sample bill is generated in one fiscal year, but the credit note is posted in the next year.
      All these cause mismatches — so check posting status carefully.

  • Case 6: [Reserved for additional cases based on audit findings]

4. Sales Data TallyVerification (RegisterRegister's Taxable vs Ledger)Ledger Income)

Steps for reconciliation:

  1. Load the Sales Tax Register.

  2. LoadOpen Ledger Reconcile Report in Accounts.

  3. Apply filters:

    • FilterMain byHead: Direct Income, Indirect Income.

    • Voucher type:Types: Sales & Credit Note.

  4. Compare both reports.

  • If mismatched, review the above cases.

  • If sales values areappear inunder non-income ledgers, re-check which voucher type (Sales,Sales or Credit Note) andcaused where they were posted.it.

For client explanation:


  • Use the Ledger Reconcile Report to show the exactflow voucherof flow.

  • vouchers.
    Demonstrate: “This voucher created this entry, and this is why the mismatch occurred.happened.”

    5. Sales Register VAT vs Ledger VAT

    VAT must also be verified in the same way as sales:

    • In the Ledger Reconcile Report, filter for VAT Payable ledger.

    • Voucher Type: Sales & Credit Note.

    • Compare ledger VAT with register VAT.

    Note:

    • Some properties may deduct paid VAT directly from VAT on Sales or VAT Payable, causing mismatches.

    • Always verify only Sales & Credit Note vouchers for a proper audit.

    • Small differences (±5) are acceptable due to decimal rounding, since systems only store two digits after the decimal.

    6. If Data Still Does Not Match

    If mismatches remain even after applying the above checks:

    • Perform deeper verification using different methods.

    • It may be caused by system errors, double postings, or other technical issues.

    • These require detailed investigation and may not have a single fixed rule.

    ✅ With this process, youauditors can confidently verify whether reported sales and taxes are accurate and fully matched between the Sales Tax Register and the Accounts LedgerLedger..

    Documented By - Sundar Mishra.

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