How to record goods with VAT: purchase price, markup, expenses, and rounding

When receiving goods, a supplier may specify the unit price excluding VAT, the VAT amount separately, and the total amount payable. In another delivery note, the price may already include VAT. This determines which purchase price to enter in Torgsoft and whether VAT should be added. Choosing the wrong option may cause the goods receipt total to differ from the supplier's document, while the calculated selling price may be higher than expected. You should also check the expenses associated with the delivery note, rounding rules, and enterprise settings.

What You Need to Distinguish

If the Supplier Specifies a Price Excluding VAT

Open Document → Goods Receipt and create a delivery note using Add or New Receipt. In the document header, select the supplier and, if you maintain records for several business entities, the appropriate Enterprise.  

If the supplier's document shows the product price excluding VAT, enable «Add VAT to the Product Purchase Price». Enter the VAT-exclusive price in the product record. Torgsoft will add VAT to calculate the VAT-inclusive purchase cost. The software will then use this amount to calculate the retail price based on the specified markup.

For example, the supplier specifies:

• price excluding VAT — UAH 100;

• VAT on this product — 20%;

• price including VAT — UAH 120.

Enter UAH 100 in Torgsoft, and adding VAT produces a purchase cost of UAH 120. With a 25% markup, the calculated selling price will be UAH 150 before other expenses and rounding.

If the Supplier's Price Already Includes VAT

If the unit price in the delivery note already includes VAT, do not enable «Add VAT to the Product Purchase Price». The official Help documentation explicitly warns that otherwise the software will add VAT to the entered purchase price again. 

For example, if the supplier specifies UAH 120 including VAT and you enter UAH 120 in Torgsoft while enabling the addition of 20% VAT, the software will calculate the price as though UAH 120 were the pre-tax price.

Therefore, if the goods receipt total in Torgsoft exceeds the amount in the supplier's document, check this switch first. This situation also occurs in actual technical support cases: after disabling VAT addition that was enabled by mistake and recalculating prices, the delivery note total matches the purchase amount.

Why the Selling Price Changed After Receiving Goods

VAT is only one factor. Torgsoft can also take supplier discounts and delivery note expenses into account.

The «Delivery Note Expenses» tab contains financial expenses, percentage-based expenses, and expenses in foreign currency. The delivery note terms let you choose how these are accounted for: «Include in Product Cost», «Include in Supplier Settlements», or «Do Not Include».  

This is important, for example, when a store pays separately for goods delivery.

If an expense is included in the cost of goods, it increases the product's «Additional Cost». If a financial expense is not included in the cost of goods, it is recorded as «Additional Purchase Cost»: the inventory cost does not increase, but the expense may affect the selling price calculation. 

In general, Torgsoft accounts for the purchase price, VAT where applicable, discounts and delivery note terms, additional cost, and additional purchase cost in sequence. The markup is then applied to the resulting amount.

Therefore, comparing the markup percentage only against the supplier's original price is not always correct. If delivery or other expenses have been added to the goods, the price calculation base has changed.

After entering or changing expenses, select «Recalculate Prices in the Delivery Note». Torgsoft will recalculate the supplier price, additional cost, additional purchase cost, and selling prices. The software also prompts you to recalculate when switching from «Delivery Note Expenses» to «Delivery Note Items» if expenses or discounts have been added or removed. 

How to Configure Purchase Price Rounding

Adding VAT can result in fractional kopecks during calculations. Torgsoft provides a separate setting for this: Settings → Parameters → Documents → «Round Purchase Price in Goods Receipt».

When enabled, the supplier's price is rounded to kopecks during calculations for delivery notes with «Add VAT to Purchase Price» selected. 

This setting specifically rounds the purchase price. It should not be confused with retail or wholesale price rounding.

How the Selling Price Is Rounded

In Torgsoft, you can configure a separate rounding rule for selling prices.

The general rule is set under Settings → Parameters using «Round Selling Prices to Whole Numbers».

A separate rule for a particular product type can be set in the Product Type record using the «Price Rounding» field. The available options are:

• do not round;

• round to a whole number;

• round to kopecks;

• round to 5 kopecks.

You can also use the «-1 from the rounded price» setting, for example, to obtain a price of 29.99 instead of 30.00 after rounding.

If a product type has its own rounding rule, it is applied when calculating prices for products of that type. If no separate rule is set, the general software settings apply.

Therefore, if the price calculated using the markup differs from the expected price by a few kopecks or a hryvnia, check not only VAT but also the rounding rule for that product type.

If Several Enterprises Operate in One Database

In a goods receipt, you can specify the Enterprise receiving the goods. Torgsoft uses this separation, among other things, to maintain a separate goods and financial balance with the supplier for each enterprise. 

For each enterprise, open Settings → Enterprise. The record contains the «VAT Payer» parameter. 

It has three states:

1. not specified — the software determines VAT treatment according to the product type settings;
2. yes — VAT is applied in fiscal receipts generated from this enterprise's documents at the rate specified for the product type;
3. no — VAT is not charged in fiscal receipts generated from this enterprise's documents.

The parameter also affects VAT calculation in invoices and delivery notes. Its operation is linked to «Apply VAT by Product Type», which can be checked under Inventory Management → Product Type in the record for the corresponding product type. 

The «VAT Payer» setting must correspond to the actual tax status of the specific Sole Proprietorship or legal entity. The Torgsoft parameter itself neither determines nor changes that status.

At the same time, do not treat this parameter as automatically creating two independent pricing systems — for example, a separate «VAT-inclusive retail price» for an LLC and a «VAT-exclusive retail price» for a Sole Proprietorship. VAT in documents and selling price calculation rules are different settings and must be checked separately.

If the Amount or Price Does Not Match Expectations

First, compare the supplier's document: does the unit price include VAT or exclude it? Then check «Add VAT to the Product Purchase Price».

If VAT is configured correctly, check «Delivery Note Expenses»: look for delivery costs, bank fees, markup, discounts, or other terms included in cost or supplier settlements. After making changes, select «Recalculate Prices in the Delivery Note».

If the difference is only a few kopecks, check Settings → Parameters → Documents → «Round Purchase Price in Goods Receipt». For selling prices, separately check «Price Rounding» for the product type.

If records are maintained for several Sole Proprietorships or legal entities, check which Enterprise is selected in the document and the value of its «VAT Payer» parameter.

Quick Procedure

If the supplier's price excludes VAT, enable «Add VAT to the Product Purchase Price». If the price already includes VAT, leave it disabled. Then check additional expenses, recalculate prices, and only afterward assess the resulting markup and selling price.