This article presents the work steps that allow the accountant to review the accounting material submitted by a Solo entrepreneur in Procountor.
Entrepreneurs submit the accounting material once a month from Solo to Procountor. The entrepreneur attaches the receipts to the bank statement transactions in Solo and selects the product for the transactions (in Solo, these are called expense types). Any transactions that do not appear on the bank statement are sent to Procountor as a journal. The following table illustrates the format in which the material is sent from Solo to Procountor.
|Bank statements and reference payments
|The Solo entrepreneur attaches all sales, purchases and other expenses to the bank statement transactions in the Solo entrepreneur’s user interface. These transactions appear on the Bank statements and reference payments view in Procountor after the accounting material is submitted. In connection with the purchase and sales transactions, the relevant value added tax and accounting account information (accounting account, VAT percentage, VAT status) is also transferred to Procountor.
|The entrepreneur can send, for example, a cash report from Solo, which also includes information on cash sales. In addition, the journal receipt contains the receipts that the entrepreneur has reported as cash purchases. The journal receipts arrive with the accounting material.
|Own-initiative tax return
|The accountant makes the VAT summary and own-initiative tax return in Procountor normally. When the own-initiative tax return is approved in Procountor, this generates a payment receipt in Solo. The entrepreneur pays the own-initiative tax return in Solo.
|The accountant adds the company’s accounting material, such as an income statement and balance sheet, to the Documents view in Procountor. The information is transferred to the Documents view in the entrepreneur’s Solo interface.
Accountant's steps after submitting the Procountor Solo accounting material
Step 1: sending accounting material from Solo
Every month, the entrepreneur sends their accounting material to the accountant in Procountor by clicking the Submit accounting material button in Solo. If the accounting material has not been submitted for several months, the material is submitted one month at a time, until all missing months have been delivered. More detailed instructions for submitting the material are available here. The sending of accounting material between Solo and Procountor can take a few hours, so the material might not be immediately available in Procountor after sending.
- The accountant sees the submitted material in Procountor in the Bank statements and reference payments view when the bank statement transactions have new attachments. If the entrepreneur has submitted other transactions that are not linked to the bank statement with the material, these generate journal receipts in accounting.
- The accountant sees the bank statement immediately after it has been retrieved to Procountor from the bank – however, the actual bank statement material (including the attached invoices and receipt) will be visible after the entrepreneur has submitted the accounting material in the Solo entrepreneur’s user interface.
- The default postings and VAT specifications corresponding to the entrepreneur’s material are updated on the bank statement’s accounting page only after the Update accounting button has been clicked.
Please note that the accounting events created during trial use and before the bank connection is opened must be sent to accounting manually.
Step 2: handling of bank statements and reference payments
Go to Payments > Bank statements and reference payments view from the Procountor main menu. A special feature of accounting material submitted from Solo is that the Bank statements and reference payments view also contains the Posting defaults retrieved column.
All the information sent with the entrepreneur’s material can be found in the Posting defaults retrieved column. This column contains the check mark shown in the upper image when the material sent from Solo includes information related to value added tax processing or accounting account selection that is generated either:
On the bank statement, based on:
- the entrepreneur’s expense type selection,
- the information sent with the online purchase invoices paid in Solo, or
- the information sent with the receipts attached to the bank statement in Solo.
In the reference payments:
- Accounting account that is based on the customer’s selections and established by Procountor Solo.
- The different VAT rates on the customer’s invoice appear on different rows.
- The correct VAT status is selected in Procountor based on the VAT code on the customer’s invoice. The VAT statuses for the VAT codes can be found here.
- If the document is not a sales invoice, the accounting account and VAT status depend on the entrepreneur’s selection. Further information can be found here.
An individual bank statement row marked with the check character can also contain combinations of the aforementioned information sources. The row can include, for example, the accounting account and VAT status that are based on the entrepreneur’s expense type selection. It can also include transaction row-specific VAT percentage and amount from a receipt photographed in Solo.
The row-specific VAT percentage and amount data that is captured by Solo’s image and text recognition technology and attached as receipts to the technical data of online purchase invoices paid through Solo and bank statements overrides the expense type data that is sent to Procountor from the product register.
The data can originate in the following sources:
- The row-specific VAT percentage and amount data contained in the technical data of online purchase invoices paid through Solo.
- If a purchase invoice paid through Solo includes transactions with several different VAT rates, the purchase invoice generates several rows in the accounting page of the bank statement, depending on how many VAT percentages the original invoice has.
- If the invoices are paid through an online bank and their images are linked to the bank statement transactions in Solo afterwards, the row-specific, exact VAT percentage and amount of the paid purchase invoice cannot be read with this method.
- The row-specific VAT percentage and amount data contained in the card receipts are attached to the bank statement, which the Solo image and text recognition technology reads directly from the receipt.
- If a receipt includes transactions with several different VAT rates, the receipt generates several rows in the accounting page of the bank statement, depending on how many VAT percentages the original receipt has.
- If the image recognition fails (for example, if the receipt is crumpled, dirty or otherwise poor in quality), the VAT percentage is based on the percentage set for the expense type in Procountor’s product register.
- The expense type selected by the entrepreneur for the receipts or purchase invoice receipts attached to the bank statement. The VAT status and accounting account are created on the accounting page of the bank statement transactions based on the expense type selection. These are specified in the product-specific settings of the Procountor product register, based on the expense type.
An individual reference payment row with the check mark includes the imported accounting account, amount, VAT percentage and VAT status. The data imported to accounting varies by the method used by the entrepreneur.
The data imported to the sales invoices is based on the rows the entrepreneur adds to the invoice
- All data that is imported as sales invoices is imported directly to accounting account 3000.
- If you want to change the accounting account, see the instructions on default posting of reference payments.
- The row-specific VAT percentage and amount data contained in the sales invoice data sent via Solo.
- If a sales invoice sent through Solo includes several different VAT rates, the sales invoice generates several rows on the accounting page of the reference payment, depending on how many VAT percentages the original invoice has.
- The VAT status is based on the VAT code selected by the entrepreneur for invoices with a 0 VAT percentage. The VAT status of VAT codes cannot be edited. The VAT codes in the accounting are as follows:
- AE – VAT reverse charge
- VAT_45 – Reversed tax liability of construction services 24%
- E – Exempt from tax, for example, marginal tax
- VAT_12 – No VAT handling
- G – Free export item, tax not charged
- VAT_3 – Outside of the EU
- K – Exempt from EEA intra-community supply of goods and services
- VAT_22 – EU community sale (service)
- O – Services outside scope of tax
- VAT_12 – No VAT handling
- S – Normal domestic sales
- VAT_1 – Domestic
- Z – Zero rated goods
- VAT_2 – Sales taxable at zero VAT rate
- AE – VAT reverse charge
Other reference payments are imported based on the entrepreneur’s selection. Please note that some of the revenue processed by the entrepreneur with this method may be bank statement transactions without a reference, so the default posting of reference payments does not cover all of these imports.
If the revenue is not a sales invoice, the entrepreneur must select the correct transaction type, which lets the accountant know what kind of transaction it is.
These selections are imported as follows to accounting. Default postings for reference payments affect the importing of the accounting account of certain transactions, if these have been edited. By default, the selections are imported as follows.
Allocate to sales invoice
- This is a manual allocation, after which the sales invoice data in the system is connected with the transaction and imported in the same way as described for sales invoices above.
- The selection in question is imported to accounting account 3000
- The VAT status is VAT_1 – Domestic
- No VAT specification
I will report revenue on a sales report
- The selection in question is imported to accounting account 1700 (accounts receivable)
- This selection is connected to the Other sales functionality in Procountor Solo,
- Other sales journal, which is based on the entrepreneur’s sales report, records the amounts added by the entrepreneur to the sales account, removing them from the accounts receivable (see step 3)
- VAT status VAT_12 – No VAT handling
- This selection is connected to the Other sales functionality in Procountor Solo,
- The selection in question is imported to accounting account 1900
- VAT status VAT_12 – No VAT handling
- The selection in question is imported to accounting account 1777
- VAT status VAT_12 – No VAT handling
Bank statements and reference payments -view
The following section shows how to handle accounting material from Procountor Solo on the Bank statements and reference payments view (Payments > Bank statements and reference payments).
Please note that there will be no separate sales and purchase receipts in Procountor with regard to Procountor Solo. The accounts are handled with the help of bank statements, reference payments and journal receipts. For this reason, the Allocated column of the Bank statements and reference payments view can be pink to indicate unallocated reference payments without requiring any measures.
Select the accounting period for which the material has been submitted from Procountor Solo as the period to be handled. For example, if you are handling the January accounting period, retrieve the bank statements from the period January 1, 2020–January 31, 2020. It is important to limit the bank statement transactions to the period in question in order to update the default accounting only for the new transactions with the Update accounting button.
In this case, the information arriving with the invoice and receipt material from the Solo user interface, the information corresponding to the expense type selections and the information based on the default posting rules of the Procountor bank statement are updated on the accounting pages of all the bank statements and reference payments selected for the view within the given period. If default posting of bank statements or reference payments has been made on a bank statement or reference payment row and the row in question will also have accounting account data from Solo, the selections corresponding to the default posting rules of the bank statement and reference payments will take priority when the Update accounting button is clicked
Make the manual entries only after clicking the Update accounting button. The button overrides all previous manual entries, restoring the bank statement and reference payment accounting page with data corresponding to the information sent from Solo, the bank statement and the reference payment default posting rules.
If the bank statement and reference payment transactions require manual entries after clicking the Update accounting button, you can make them as follows.
- If the accounting of reference payments is completed manually, the entries must be made one reference payment at a time on the accounting page.
- Default postings for reference payments are described in more detail in the deployment instructions here.
Open the attachments on the Bank statements and reference payments view by activating the first bank statement import and clicking the Attachment button on the upper right corner. You can open the editing page for the bank statement accounting page with the same button to make the recording of entries faster:
Step 3: journal receipt handling
The journal receipts transferred from the entrepreneur’s user interface in Procountor Solo can be found under Accounting > Journal receipt search in Procountor. Select the start date of the accounting period as the time period.
- Check the journal receipts sent from Procountor Solo.
- If necessary, create new journal receipts for the accounting period.
Journal receipts are created from Procountor Solo transactions that cannot be linked to a bank statement. For example, a sales report from a cash system generates a journal receipt if it cannot be linked to a bank statement transaction. The receipts of payments made with the entrepreneur’s own money or the company’s cash and photographed by the Solo entrepreneur also generate journal receipts.
In addition to the journals arriving from Procountor Solo, other accounting entries might be needed in the accounting. For example, depreciation and amortisation, accruals or the importing of salary accounting receipts to Procountor. New journals can be created, for example, with the Ledger entry tool in Procountor.
Example: Solo entrepreneur has created a purchase made with own cash in the Solo user interface
In the Procountor Solo user interface, the entrepreneur always selects a payment method for the receipt. If the entrepreneur selects that the purchase was made with the entrepreneur’s own card/cash or the company’s cash, these payment methods are turned into journal receipts.
The OCR function of Procountor Solo fills out the place of purchase, date and amount on behalf of the entrepreneur from the receipt. The entrepreneur checks the information and specifies the expense type, after which the transaction is complete. The information can also be edited manually.
Generating journal receipts in Procountor
When the entrepreneur submits their monthly accounting material from the Solo user interface to the accountant in Procountor, the following journal receipt is generated from the purchases made with the entrepreneur’s own card or cash that are dated for the month in question:
The journal data is imported as follows:
- The place of purchase is the name field of the journal, and the date is imported from the receipt.
The content of the rows is formed as follows:
- The reversing entry account depends on whether the company specifies itself as a sole trader or a limited liability company at login.
- For sole traders, the reversing entry account is 2340 Private accounts during the financial year
- For limited liability companies, the reversing entry account is 1900 Cash in hand
The value added taxes OCRed from in the receipt are imported as separate rows to the journal. Expense type data (from the purchases product register) is also used in creating the rows. Based on the entrepreneur’s expense type selection, the rows are created with the help of the accounting account and VAT status, which are the same for all the accounting rows.
The VAT status of the expense type determines whether the VAT data of the receipt is imported or not. Only the Domestic VAT status enables importing the VAT rate to the system.
If the OCR function is unable to produce the data, the VAT percentage of the expense type (from the purchases product register) is imported in addition to the accounting account.
Example: Other sales report created in the Solo user interface
The Solo entrepreneur can submit their sales for the cash system, payment terminal or other sales tool as part of the accounting material by using the Other sales report in the Solo entrepreneur’s user interface. The instructions on the Other sales report in Solo contain an image of what the Other sales report looks like in the entrepreneur’s Solo user interface.
When the entrepreneur submits their monthly accounting material from the Solo user interface to the accountant in Procountor, the following journal receipt is generated from the Other sales report:
The content of the rows is formed as follows:
- The entrepreneur has recorded sales of EUR 1,000.00 with the 24% VAT rate on the Other sales report.
- The entrepreneur has recorded sales of EUR 570.00 with the 14% VAT rate on the Other sales report.
- The entrepreneur has recorded sales of EUR 200.00 with the 10% VAT rate on the Other sales report.
- The entrepreneur has recorded sales of EUR 100.00 with the 0% VAT rate on the Other sales report.
- The entrepreneur has specified EUR 200.00 of the aforementioned sales as cash sales on the Other sales report. The row corresponding to this amount is generated on the 1900 Cash in hand account on the Procountor journal receipt.
- The entrepreneur has recorded EUR 20.00 as sales expenses on the Other sales report.
- An amount of EUR 1,650.00 that awaits payment by Nets remains on the report, and this creates a row on the 1700 Accounts receivable account in Procountor.
When the payment arrives from Nets, the reference payment appears on the bank statement.
In order to record the transaction correctly, the accounting page of the bank statement must contain the following entries:
Similarly, the accounting page of the reference payment must contain the following entries:
Step 4: accounts and transactions report
The accounting of Procountor Solo accounts is based on the accounting pages of bank statement and reference payments and on the journal receipts. The Accounts and transactions report enables checking the accounts before preparing the VAT summary. The report can be found under Accounting > Reconciliation tools > Accounts and transactions in Procountor.
1. Go to the report and update the reporting database.
2. Select the accounting period and find the report.
The Accounts and transactions report enables making the following checks:
- Make sure that the period has no incomplete receipts.
- The balance of accounting account 1990 must be zero.
- The balance of accounting account 2880 must be zero.
- If necessary, monitor 1777 Clearing account and ask additional information from the entrepreneur.
- The Amount recorded under Changes in VAT and receipt balancing differences must be 0.00, if the VAT summary has already been made for the period.
Step 5: create vat summary
In Procountor, the VAT summary records the value added tax share of imports to accounting account 2930. The value added tax is calculated for each accounting entry, but the value added tax of the accounts is generated by the VAT summary import, one month at a time. The VAT summary analyzes the VAT shares of the imports during the accounting period and prepares a summary of the shares. More detailed information on the VAT summary is here.
- The VAT summary is created in Accounting > VAT summary > Create VAT summary.
Step 6: checking the result and balance sheet account balances
Go to the Accounts and transactions report and see the Amount field under Changes in VAT and receipt balancing differences; if there is no difference, the amount is 0.00.
If the amount is not 0.00, check the following:
- Is there an accounting receipt with mismatching debit and credit information? You can search for mismatching receipts with the receipt reconciliation report.
- Have there been any changes to the accounting after creating the VAT summary? Receipts edited after the VAT summary can be found using the Get modified receipts button in the VAT summary creation view.
More detailed instructions for the balancing of differences are available here.
Step 7: create own-initiative tax return
Create the own-initiative tax return. The API sends the payment receipt for the tax return to Procountor Solo, where the entrepreneur approves and pays it.
- Approving the tax return creates a receipt on the payment of own-initiative taxes for the entrepreneur. In order to create the payment receipt for the entrepreneur, the payment information of the Finnish Tax Administration must be filled out in the settings in Procountor (Management > Accounting info > Taxation information).
- Note! Because the Solo entrepreneur receives a payment receipt for the own-initiative tax return when its status is Approved, it should be ensured that incomplete or inaccurate own-initiative tax returns are not stored in Procountor unnecessarily. All unnecessary tax returns should be invalidated immediately if it is known that the return must be made again later for the period in question. If an incomplete or inaccurate own-initiative tax return that is in the Approved status is invalidated afterwards and a new own-initiative tax return is created for the same period after the invalidation, the entrepreneur can receive payment files for both of these tax returns.
- The instruction manual for Solo entrepreneurs contains an image of what the own-initiative tax payment file looks like in the Solo user interface.
- When the own-initiative taxes are paid in Solo, the payment transaction is automatically allocated from the bank statement to the own -initiative tax return.
Step 8: create balance sheet itemisations
If the balance sheet itemisations are made on a monthly basis, they can also be created for small operators. If the balance sheet itemisations are made in connection with the financial statements, this step can be skipped until the end of the financial year.
Step 9: close the tracking period
Management > Accounting info > Financial years > Edit tracking periods > Change status > Closed.
Tracking periods help to protect the accounting so that changes cannot be made to months marked as completed. Tracking periods are typically made on a monthly basis, so that the accounts can also be protected one month at a time.
It is possible to open the tracking period later, if needed, and make changes to the accounts. If a fiscal period is opened and the accounting is changed later, remember to create a new VAT summary and, if necessary, an own-initiative tax return for the period.
Step 10: submit accounting reports to the customer
In the Accounting > Accounting reports view, you can search for the reports to be submitted to the customer, such as the income statement and balance sheet.
- Find the report and save it on your computer as a PDF file.
Go to Search > Documents. Attach the accounting reports to the Documents view, from where the reports are automatically transferred to the Documents view in the entrepreneur’s Solo.
Effects of cash-based accounting on the accountant’s steps
When the accountant prepares the accounts for the Solo environment, cash-based accounting causes minor differences in a few Procountor functions that play an important role in the accrual accounting process.
Allocated column in the bank statements and reference payments view
The Bank statements and reference payments view includes the Allocated column, which is by default pink in the Solo environment with regard to reference payment rows:
In accrual accounting, the pink colour illustrated in the above image would mean that the reference payment has not been allocated correctly to a sales invoice in Procountor. However, when the accounting method in Solo is cash-based, Procountor has no sales invoice receipt to which the reference payments could be allocated as in accrual accounting. For this reason, the pink colour of the Allocated column can be ignored in the Solo environment. If you want, you can mark these fields that indicate an unallocated status as Allocated elsewhere by clicking the Allocate elsewhere button under Edit reference payment. Sales transactions, on the other hand, are recorded directly on the accounting page of the bank statement and the related reference payment.
Reconciliation report for open invoices
The reconciliation report for open invoices is a useful tool for accrual accounting in Procountor. However, because accounting in Solo is cash-based, tracking this report is not needed. Because Procountor does not have separate sales or purchase invoice receipts, the Open invoices column of the report is always zero.
Salary calculation in solo
The accountant can calculate the Solo entrepreneur’s salaries normally with Procountor’s salary calculation tools that are also used in other Procountor product versions. More information on the implementation of salary calculation, the specification of the necessary settings and the salary calculation process can be found in the Procountor instruction manual section on salary calculation. When the salaries are calculated in Procountor, the accountant or payroll accountant is responsible for paying the salaries, making the notifications to the Incomes Register and paying the Incomes Register notification fees. The accountant can submit the pay slips to the entrepreneur using the Documents function that is part of the Solo product version. More information on salary calculation in the Solo environment is available in this article in the Solo instruction manual.
Solo entrepreneurs can also calculate their salaries themselves via the Solo user interface with the Palkkaus.fi function. In this case, the Palkkaus.fi service sends the Incomes Register notifications and the necessary payment data related to the salaries and Incomes Register notifications are created in the Solo user interface, where the entrepreneur pays them. Salaries created with the Palkkaus.fi function generate journal receipts in Procountor for the entrepreneur – these journal receipts are part of the monthly accounting material. When the salaries are calculated in the Solo user interface with the Palkkaus.fi function, the accounting entries for journal receipts in Procountor can be generated for any of the following accounts, depending on what kind of salary the entrepreneur has paid to themselves in the Solo user interface.
These accounts are used when the salaries created in the Palkkaus.fi function generate journal receipts in Procountor:
|Edellisten tilikausien voitto/tappio
More information on the salary calculation steps in the Palkkaus.fi service is available in this video (In Finnish).
Travel and expense invoices in Solo
The accountant cam calculate the Solo entrepreneur’s travel and expense invoices normally with Procountor’s tools. More information on the creation of travel and expense invoices is in the Travel and expense invoices section of the Procountor instruction manual. When the travel and expense invoices are created in Procountor, the accountant or payroll accountant is responsible for paying the travel and expense invoices, making the notifications to the Incomes Register and paying the Incomes Register notification fees. The accountant can submit the invoices to the entrepreneur using the Documents function that is part of the Solo product version. At the moment, the Solo environment does not have a function for creating travel or expense invoices, but the Solo instruction manual contains a few alternatives for creating these invoices in the program. Read the instructions here.
Payment and sending errors in the solo environment
Information on any payment and sending errors related to payments and electronic invoices created in the Solo entrepreneur’s Solo user interface is always delivered to the entrepreneur either directly to the Solo user interface or with a separate e-mail message from the Isolta customer service, so that the entrepreneur knows to pay and send the invoice again.
In some cases, the accountant might see the error messages related to payments made by the entrepreneur in the Payment and sending errors view in Procountor. However, the accountant does not need to react to these errors that are related to payments by the entrepreneur, as the messages will always be displayed for the entrepreneur in the Solo user interface. The accountant can remove these errors from the Payment and sending errors view. Depending on the payment transaction, the accountant should have the relevant access rights in order to handle payment and sending errors.
If the accountant has made an erroneous payment directly in the Procountor user interface, using a bank account set up for the environment, the payment error related to this payment is displayed in the Payment and sending errors view in Procountor normally. In this case, the payment error information is not shown to the entrepreneur in the Solo user interface, because the entrepreneur did not make the payment in the first place. In other words, the accountant must handle any payment errors they make themselves in the normal way and make the payment again, if necessary.