Hi there, please could someone help in just explaining how quickbooks deals with VAT from inputting sale invoice or purchase invoice to reconciling VAT return and how to then clear down the VAT liability, just using a simple example, I am new to quickbooks and understand sage bookkeeping/double entry etc.. any help appreciated as have new client with a lot of data that has been input wrong. Thanks very much.
Yes. Simply Quickbooks calculates the input and output tax on the transaction you process according to the VAT item list rates (if a rate changes, you change it in this list or add a new rate) and is linked to a payables and receivables account.
Once you process your transactions either through the supplier or customer module, QB automatically posts the VAT to the control account on the Balance Sheet; journals are slightly different as you have to tell QB that the item is VAT'able and which VAT Agency to use in the name field; it does help you in so far as it provides a drop down list for you to select which VAT code you want to use.
At the end of the quarter, you simply use the VAT menu to file the return (it doesn't actually file it to HMRC) which clears the VAT100 report to zero and puts the liability to payables (or receivables if you are due a refund). It's seems a bit confusing but easy once you get the hang of it.
If you want to contact me offline, we can spend a few minutes going through it on the phone if it helps.
Thanks David, my email address is julie@firefly-bookkeeping.co.uk a brief chat at some time will help me, if you are happy to email your phone number would be much appreciated. Julie
