A client recently handed me over a hundred un-processed supplier invoices which were raised during the previous VAT period. The total input tax comes to over £2600. It seems to me that the obvious thing to do is simply to add the purchase and VAT figures to the current VAT Return.
The VAT Man wouldn't count these additions as an "error", would he?
I am not an expert on VAT so don't know what a VAT inspector would say but from an accountant/auditor perspective alarm bell are ringing.
100 or so invoices seems a bit excessive to have been missed the previous quarter. What were the clients reasons for not putting the invoices through? Don't think this is good practice. It wasn't at the year end by any chance? A company/business in financial difficulty may withhold invoices at the year end in order to show a better picture in the accounts, maybe to reduce a loss?
You should at least query it anyway.
Carole
-- Edited by littlebookkeeper on Tuesday 3rd of August 2010 04:45:04 PM
Yes - it was at year-end, and I'm taking over from a previous bookkeeper. The underlying reason would seem to be sheer lack of procedure (or any respect for anything to do with accounts, for which he also employs a top flight accountant). His primary filing system appears to be the floor of his 4x4!
But MLR rules, and I, at least, have a system for that!
My fanciful aim is to introduce him to a system for retrieving invoices weekly, and in a way that doesn't get in the way of his doing his work. Time will tell .... this account is certainly costing me a huge amount of extra time which wasn't estimated when I was first introduced to it.
I would also let the accountant know of these invoices if they don't already, may get you brownie points and they will need to accrue for these invoices in the previous years accounts.
