I've finished my clients first vat quarter on Sage Instant Accounts. They use the cash accounting scheme for VAT and I've just reconciled the VAT and completed the VAT wizard. I thought that was the end of the process but if I print the TB at the q/e and add the sales tax a/c, purchase tax a/c and the vat liability a/c together it does not agree to the amount due per the vat return I've just submitted?
I'm now really concerned that I've calculated the VAT incorrectly? Can anyone suggest where I might have gone wrong and how I should correct it? Thank you.
As you probably know - if a business uses the cash accounting scheme for vat they only account for the vat when payment is actually made or received. If you post a sales/purchase invoice onto sage the vat element gets posted to either the sales or purchase tax account. The vat won't actually hit the vat return until it's paid/received. This is almost certainly what is causing your difference.
To reconcile the vat liability per the return to the balance on the sage TB, you need to add the vat due on trade debtors at the q/e to the amount per the return. This is the output vat that will be due when your client receives it (the TB already reflects this). Then you need to subtract the input vat reclaimable on trade creditors. This figure should then agree to the balance on the sage TB.
Dustin
-- Edited by Dustin57 at 21:59, 2008-01-03
__________________
"People who are exceptionally good in business arent so because of what they know but because of their insatiable need to know more"
Dustin, thanks for that. I was banging my head against the wall trying to figure it out. Just in Sage now and trying to suss out how I get the vat on debtors and creditors. Is there a report I can run that will give me the amount?
Todate I've not found a report on sage that breaks down the vat on debtors and creditors. The way I do it is to print an aged debtors/creditors report and calculate the vat on each o/s invoice. I note the transaction number and trace the vat amount due. You have to be careful if an invoice has been part paid as only the proportion still o/s will be relevant to the reconciliation.
Dustin
__________________
"People who are exceptionally good in business arent so because of what they know but because of their insatiable need to know more"
