VAT, Bills and Records for Building Materials Dealers

A building materials dealer handles large bills, many credit customers and frequent purchases from producers and distributors. That makes record keeping a serious matter. This guide covers habits that matter for VAT, bills and stock records in Nepal. It is about keeping your books tidy, not tax advice. Rules and thresholds change, so confirm anything specific with the Inland Revenue Department or your accountant.

Know whether you are VAT registered

Whether you charge VAT depends on your registration and the kind of goods you sell. Where you are registered, the standard rate is 13%, and bills must be in the form the law requires. If you are not sure whether you need to register, ask the IRD or a professional accountant instead of guessing from what a neighbouring dealer does. The answer decides how you design your billing.

Keep PAN and VAT details of customers

Many large buyers such as contractors, companies and institutions want a bill in their name with their PAN or VAT number. Capture these once on the customer profile so each bill carries them correctly. Retyping them for every sale is where mistakes creep in. Software that stores the buyer's details removes that chore.

Match purchases with sales

VAT paid on purchases and charged on sales both need documents behind them. Keep every supplier bill, enter it in the purchase register and connect it to the stock it added. When a bill is missing, the stock still arrived, so your stock and your paperwork part ways. A monthly check of purchase bills against deliveries received catches this early.

Delivery notes support the bill

A delivery note is not a tax document by itself, but it is your proof of what left the yard. Where a customer questions a bill, the signed delivery note settles it. Number your delivery notes in sequence, never reuse a number and record cancellations instead of tearing them out. Software enforces this automatically.

Records worth keeping

• Sales bills in running number order, including cancelled ones
• Purchase bills from every supplier with date and amount
• Delivery notes with vehicle number and site
• Contractor ledgers with receipts and cheque details
• Stock count sheets with differences and reasons
• Credit notes for returns or rate corrections

The Nepali fiscal year

The Nepali fiscal year begins in Shrawan, so your books should close and open on that cycle. Opening stock and opening balances for the new year should be carried forward cleanly. In a notebook this means retyping a lot of figures. In software it is a closing procedure that carries balances across. Ask your accountant which reports they need and have them available at year end.

Cash, cheque and digital receipts

Contractors pay by cash, cheque, bank transfer or QR. Each should be recorded against the right bill with the date and reference. For cheques, keep the number, bank and date. A bounced cheque should reverse the receipt and bring the balance back so the contractor ledger is true. Do not hold cheques in a drawer with no entry.

Reports your accountant will ask for

Report	Used for
Sales register	VAT calculation and sales review
Purchase register	Input claims and payable tracking
Stock statement	Valuation at year end
Party ledgers	Receivables, payables and confirmation of balances
Cash and bank book	Reconciliation with statements

Returns, discounts and rate corrections

Paperwork gets messy when a bill needs correcting. A contractor returns damaged bricks, you give a discount for a large order or a rate was entered wrongly. Do not scratch out and rewrite a bill. Issue a credit note or a corrected bill with its own number and a reason, and keep the original. Auditors and tax officers expect a trail, and so does your own accountant. In a notebook this is easy to skip, which is why disputes at year end are so hard to untangle.

The same applies to discounts. Record them as a discount line on the bill, not as a quietly lower rate, so you can later see how much you gave away and to whom. A monthly total of discounts by customer often surprises owners.

Who should see what

A yard has several hands on the records: the order taker, the gate person, the accountant and the owner. Decide who can create bills, who can cancel them and who can change rates. If everyone can do everything, errors are hard to trace. Role-based access and an activity log in software give you that control, and they are worth asking about at a demo. Keep one trusted person responsible for month-end closing and for checking that purchase bills, stock and ledgers agree before the figures go to the accountant.

A note on software and compliance

No software makes you compliant by itself. It can be configured to produce numbered bills, show 13% VAT where it applies and keep reports ready for your accountant. WebsNP sets it up that way, and we say clearly that you should confirm your obligations with the IRD. Our billing software page describes what the billing side is designed to support.

Start by listing your registers and see which ones still live in notebooks. Then ask for a demo of the building materials supplier software on WhatsApp and bring a sample bill and purchase bill so we configure the format with you.

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