There are often small errors between Etsy VAT Statements (invoices) and the value taken from our shop account.
We do accrual accounting for our UK VAT returns, so our accounting is based on invoiced values and dates, rather than payment values and dates. This leaves a residual value in our Accounts Payable account, and we have an expense account to dump the errors into.
Common causes of errors are:
- the VAT invoices don't include refunds of listings fees for cancelled orders
- it may also be transactions that have jumped over the month end. The date of CSV transactions just before midnight can occasionally jump into the next day after about 12 hours. I suspect that it is a timezone problem, some of Etsy's processes and reports running in diufferent timezones, or not adjusting for daylight saving time. Have you set the correct timezone for your shop?
The VAT Statement values are calculated from USD values, with end of month currency conversion rates, and then corrections for date of transaction currency conversion rates. That introduces another batch of problems:
- the individual invoice lines never match against the CSV transactions,
- the conversion rates can be calculated wrong, and there are lots of opportunities for accumulated rounding errors.
The VAT Statements are produced live every time that you access them, using the latest version of the software. They are not locked and not stored. What they do is illegal, but this is Etsy. Sometimes they change the software. This means that you may get a different VAT Statement if you download it again. I have had multiple VAT Statements with different values from the same day, so I now save them with a download date and version letter.
You won't get Etsy to change, they don't believe in accurate accounting.
Lawrence (Clare's other half)
