Lebanese accounting system specifics

Lebanese accounting system specifics

Lebanon has largely adopted the International Financial Reporting Standards (IFRS) as a basis for the country’s accounting rules.

But there are still some differences that require the modification of any standard accounting software in order handle the specific requirements of the Lebanese accounting system.

Multi Currencies support

Most accounting software supports multiple currencies however the system stores the journal vouchers the main currency.

In Lebanon, accounting auditors require to view all journal vouchers in the LBP in addition to the counter value in a foreign currencies

Our accounting implementation adds few data to the journal voucher (JV) entry to capture the debit/credit per currency at the exchange rate when the transaction occurred. Financial reports per currency

Accountants in Lebanon prefer to read financial statements based on the currency rate at the date of the transaction. At the closing date, e.g. end of year, any difference between the financial reports between currencies are posted as differences of exchange.

Automatic closing vouchers

Accountants use closing vouchers much frequently than just during the closing of the year.

In the Lebanese accounting system, there is need to declare VAT on a quarterly basis. VAT received and VAT paid must be summed and the difference added to the right account to be paid out to the VAT authorities.

Azkatech accounting module automates this operation via selecting the right amounts to consolidate with the receiving debit/credit account. It generates a draft JV (Journal Voucher) and optionally consolidate it with all VAT transactions involved, ready for auditors to approve.

Top 10 Customers, top 10 Suppliers

In Lebanon, the ministry of finances requires businesses to submit a list of their top customers and suppliers in an efforts to fight tax evasion.

In Lebanon, the ministry of finances requires businesses to submit a list of their top customers and suppliers in an efforts to fight tax evasion. Azkatech accounting module links every customer and supplier to their transactions at the JV level, which allows to generate accurate top 10 customers and top 10 suppliers.

Per customer/supplier accounts & VAT

Most of the system links all customers and suppliers accounts and VAT accounts into a single account. In the case of the Lebanese accounting requirements, the accountants split the accounts especially at the level of the supplier. A supplier can be for raw material or assets and in both cases the accounts and VAT accounts are different.

It is possible to create and use the same supplier twice; once as an asset supplier and the second time as a raw materials supplier. But this will create more issues than it solves e.g. when the supplier appears as a customer at the same time.

Azkatech Odoo accounting implementation fixes this problem by using the same partner as customer, supplier or asset supplier with one or many accounts and VAT accounts. Upon purchasing, the user selects the purchase type (e.g. asset or raw material) and the systems log the financial transaction under the right account.

Postdated check – specific to Lebanese accounting

Postdated checks (or post-dated checks) are checks to be collected in a future date.

It is a different form of aging payable/receivable but were the customer issue the payment but the supplier delays the collection. A very common practice in Lebanon used to have a guaranteed for payments since a check is a binding document regardless of the date.

Azkatech online accounting system provides a post-dated checks that tracks and manages them. It consist of the following;

• Credit the partner account upon receiving the check
• Instead of debiting the bank account, a temporary account is debited
• It then generates a report of the checks due for collection per date.
• Users send the checks to the bank for collection alongside with the report of checks sent.
• Once the banks returns a slip for the deposited check the system then credits the temporary account and debit the bank account