ERP in Nepal: VAT, Shrawan Fiscal Year and Local Needs

An ERP built for another country can be excellent software and still be an awkward fit for Nepal. The reasons are usually small and daily: a fiscal year that starts in July instead of Shrawan, a tax model that does not match VAT-inclusive pricing, dates that staff cannot read, or reports that the auditor has to rebuild in Excel. This article lists what to check so those small frictions do not become permanent costs. It covers software behaviour and record keeping only; confirm legal and tax rules with your accountant and the official bodies.

The Nepali fiscal year

The Nepali fiscal year begins in Shrawan and ends in Ashadh, and the Bikram Sambat calendar does not line up with the English months. In an ERP this affects far more than a heading on a report. Check that the system can:

• Define a fiscal year with Shrawan start and close it properly, carrying balances forward.
• Number vouchers and invoices in sequences that restart each fiscal year, if your practice requires it.
• Show reports by Nepali month, quarter and year, not only English calendar periods.
• Allow adjusting entries after year end during audit, with permissions and a trail.

A system that forces calendar-year thinking will push your accountant back into spreadsheets for every closing.

Bikram Sambat dates in everyday use

Your staff write cheques, receipts and letters with BS dates, while suppliers abroad send documents with English dates. A good ERP stores one consistent date and can show both. Test it during the demo: enter a document with a BS date, run a report for a Nepali month and check that conversion is right around month ends. Wrong date conversion on the last day of a month is a classic bug, and it can move a bill into the wrong VAT period.

13% VAT in the system

The standard VAT rate is 13%, and many businesses deal with a mix of VAT-registered, PAN-only and unregistered parties as well as exempt and zero-rated items. Ask the vendor to show:

Scenario	What the ERP should handle
VAT-inclusive and exclusive pricing	Correct breakup on the invoice without manual maths
Exempt or zero-rated items	Separate tax codes that show correctly in registers
Purchase with input VAT	Purchase register capturing supplier PAN or VAT number and bill details
Sales return or credit note	Adjustment linked to the original invoice
Monthly VAT summary	Totals by period matching sales and purchase registers

The software can arrange the data to help you prepare your return; it does not make the return correct by itself. Billing rules, such as electronic billing requirements, depend on your business and change over time, so check with the Inland Revenue Department before you decide which billing setup you need. If billing compliance is your main concern, our guide on VAT billing software goes into it separately.

Credit, cheques and receivables

Much business-to-business trade in Nepal runs on credit and post-dated cheques. An ERP that only supports immediate payment will not fit. Look for customer credit limits, ageing buckets, a cheque register with due dates and bounce handling, and reminders for dues. These features decide whether the system helps your cash flow or only records history.

Audit-ready records

Every year the auditor will ask for the document behind an entry. A strong ERP gives each voucher a number, a user, a date and optional attachments, and prevents silent edits to posted entries. Ask how corrections work: the right answer is a reversal or adjusting entry with a reason, not an overwritten figure. Also check that you can export ledgers and registers in a format the auditor can open.

Practical points beyond compliance

• Power and connectivity. Ask about hosting, backup frequency and what happens during a power cut mid-entry.
• Nepali text. Party names and addresses in Nepali should save, search and print correctly.
• Support in local hours. Month-end and Ashadh year-end are exactly when you will need help.
• Update policy. If rules change, who updates the system and is it covered by support?

Before you sign

Take your last year-end closing as a test. Ask the vendor to show how the same fiscal year, VAT summary and ageing would look in their system using sample data. Involve your accountant in the demo. If the vendor treats these as normal, ordinary requests, they probably build for Nepal. See how this applies in the broader context of our ERP software offering.

A short demo script for your accountant

Hand your accountant this list and ask the vendor to walk through it on screen, not on slides:

1. Create a VAT sales invoice for a registered customer and a PAN-only customer, then print both.
2. Record a purchase with a supplier bill dated in the last week of a Nepali month and show it in the correct period.
3. Issue a credit note against an earlier invoice.
4. Run the sales register, purchase register and VAT summary for one Nepali month.
5. Show how the fiscal year is closed and opening balances are carried into Shrawan.
6. Edit a posted entry and show what the audit log records.

If the vendor needs to say "we will customise that" for more than one or two items, the product is probably not built with Nepali practice in mind, and you should price that customisation before deciding.

Your next step

List your closing tasks for Ashadh and your monthly VAT routine, then send them with your accountant's contact to WebsNP on WhatsApp at +977 9846280400. We will configure a demo to show those exact flows before any commitment.

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