Can anyone help me with accounting for deposits. When VAT is accounted for and what invoices need to be raised and when. Where the deposit sits in the accounts etc. If possible please answer the query as if using SAGE as this would be a great help. Thanks in advance
Hi Liz, I would issue a VAT invoice for the deposit and code it to your sales n/c. The date of the invoice will be your tax point and you will account for the VAT in the period covered by the invoice (assuming standard VAT scheme). On cash accounting for VAT the VAT will be accounted for when the customer actually pays the deposit.
We have a manufacturing business where deposits are paid usually in the preceding month to delivery of the goods to the customer. If I raise the invoice in Sage for either the deposit or indeed the full amount, the accounts will get the benefit of the sale in Month 1 but then hit with the costs associated with the order in Month 2. However, I need to post the deposit payment in order to balance the bank statement! HELP!!! Any suggestions??
We are running Sage 50 Accounts Plus if that helps with the solution!
I think I would just post the deposit as a payment on account and match it up with the invoice once it is raised. If vat cash accounting Sage will ask for the tax code as it will be reflected in the vat return at date of receipt. If standard vat then it doesn;t make a difference as the invoicedate/tax point determines the vat period.
I agree that the sale and associated costs should be accounted for in the same period, and for this reason I would never raise an invoice for a deposit (I may issue a manual receipt) as the sale hasn't actually taken place at that point.
If this is a new customer then open a new account for them. In the 'BANK' screen select the bank account you have received the money into and then select 'CUSTOMERS, and then (just as if you were posting a receipt against an invoice) enter the customers code, date of receipt and the value of the deposit you may wish to enter the text deposit in the reference box, then click save - a box will pop up saying that you are posting a payment on account, if you're using cash accounting you will need to confirm the tax code T1 is usual for standrd rated. Confirm this is ok.
The receipt will then show as a 'payment on account' and leave a credit balance on the customers account.
When you subsequently raise the invoice the balance on the account will obviously then refelct the balance owed. When you receive the balance use the same routine as above to post it but allocate both invoice and the deposit by entering the value of the balance receipt in the box and selecting the invoice (press F3 to allocate) and also the depoist, so that all three transactions are allocated.
Just a thought - You may have a demo company set up (or test data) this is usually installed at the same time as the programme. Go to FILE, OPEN and then COMPANY you may have a demo company there. You can practice on this date if your a bit nervouse about how a posting works.
The HELP file in sage is usually very good search for payments on account.
Hope this helps Good luck
-- Edited by annepebo on Friday 27th of May 2011 09:11:27 AM
Now that's just random gibberish isn't it and nothing at all to do with the thread.
The quote that you've posted is lifted directly from a paper on commodity futures trading which can be found here
http://www.cftc.gov/tm/finseginterp_14.htm
Even had it been anything to do with the subject matter of this thread quoting out of context from American legislature has added nothing to this thread and I'm sure just served to confuse anyone who read your post and thought that they should have known what the heck you were talking about.
However, worry not as whenever you misquote or confuse either myself, or Wella or Peasie or one of a dozen other regulars will be there to tell our readers to ignore your posts.
Now go and learn bookkeeping and then you would be more than welcome to come back to the site and start posting constructively.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
