Recipient Created Tax Invoices (RCTI’s) are for businesses that wish to make commission payments subject to Australian Taxation Office rules. Saasu supports RCTI’s through the Type drop down in the Purchase screen.
Can I issue RCTI’s?
Please see the ATO Recipient created tax invoices template guide for information or speak to your Advisor as to the suitability for your business to use this feature.
Can I create an RCTI automatically each time I create a Sale transaction?
You can quickly create a RCTI immediately as you save your Sale transaction by following these steps noting that this applies only to sales where they are created in the Item layout (not the Service Layout):
- After entering a Sale transaction but before saving it choose Do More > Save and create purchase instead of Save or Save and Close.
- A Purchase screen will load automatically with replicated information from your sale except it will be a Purchase for the Item(s) you have just created a Sale for.
- Change the Contact to be the legal entity Contact you are paying commission to (instead of it being the supplier if it is set).
- Change the Item code to the one you have setup for commission payments. As an example you would have set this Item up as follows:
- Item Code: XYZC
- Item Description: XYZ widget (Commission)
- Buying Price: $200
- Note: Consider the tax treatment for your specific circumstance here and setup the Tax on this Item accordingly.
- Save, Print and/or Email the transaction as required for your workflow.
What this achieves is the habit of creating a commission payment every time you create a Sale. It’s not guaranteed to ensure you have captured all commission payments because there is still room for human error. Generally speaking, you still need to be following your internal reconciliation procedures at the end of each accounting period to be sure you have captured them all. This can be assisted by running a list of RCTI’s from the Purchase screen filtered for RCTI’s for the period. You can then compare the list to other reports or mechanisms you have internally to check commissions payable/paid. It’s really an accounting workflow issue, so seek advice from your Advisor about a good approach for your specific workflow.