I have just picked up the bookkeeping for a friends used car dealership.
I use sage but have never undertaken bookkeeping for a used car dealership and have never used the VAT marginal scheme also. So therefore I am a bit muddled on how to start the bookkeeping within sage?
Would the vehicles purchased for resale need to set up as products perhaps ??
Any information that you could give me to help set up and start running the companies bookkeeping would be much appreciated
Sage does not do the margin scheme very well! You can either purchase a front-end product (Dragon 2000 is the most well-known), which will provide all the sales invoicing and Sage postings; or you can produce the invoices in the normal (manual) way, and manually calculate the margin and the VAT, and post them into Sage. Do beware of Qualifying Cars - these are cars which are outside the margin scheme, because the dealer purchases them with VAT on. He has to sell them with VAT on, and cannot use the margin scheme. Some bookkeepers do use the stock system, so as to help maintain the Stock Book for VAT purposes. Others merely use the basic nominal code structure; 5000 for purchases of used cars, and 4000 for sales. It does depend how what sort of reporting you need.
Do note that the margin scheme requires Sales and Purchase invoices, and the maintenance of a Stock Book. See HMRC Notice 718/1. You can buy these from Lawdata Ltd if the client does not already use them (http://www.lawdata.co.uk/stationary.htm), or from other commercial providers.
I used Sage for the VAT margin scheme, (I've posted on AWeb about this too). Essentially, if you don't have a bolt-on like Dragon, then you'll probably have to keep the stock book and VAT calculations outside Sage. (eg import the sales into Sage, perhaps as a journal and then use the rest of Sage's VAT functionality as normal). It would also be possible to customise a Sage invoice for the margin scheme (by supressing the VAT figure from showing separately). You can do something similar in Xero. If you are working offsite, even if you do have a bolt-on, unless the garage is also using it, the usefulness is somewhat diminished because the time-saving of the bolt-on also comes from the Garage using it to maintain the stock boook and the invoicing. If you will be working onsite, it might be worth them getting a bolt-on. The decision would also depend on the volume of transactions your friend would envisage (because, by the time you've bought Sage and the bolt on, it won't be cheap)
Anyway, rather than re-invent the wheel, have a look at these three threads (incl a bit of debate about how different people would do it - so you'll see, there's more than one way to accomplish the "mechanics" of the margin scheme)
(And in answer to your specific question - no, I wouldn't set up each car as a product in Sage)
I use Sage for a couple of Margin Scheme jobs. It works fine for me -
I have an excel spreadsheet stock book which is where the margin/VAT is worked out - then at the end of the quarter I enter JNLs on Sage. The vehicles purchased initially get posted to the stock nominal code, and then JNL'd out to purchases once sold. A check I have to do each quarter is that what the spreadsheet says is in stock matches the nominal code on Sage. My sales invoices go under n/c 4000, with a tax code of T0 and then when the VAT journals are entered they come off this figure on the return (sales price - VAT). Another check I have to do each quarter is to make sure the 'sale price' column less the VAT column on the stock book matches n/c 4000 less n/c 2200.
It sounded a bit daunting when the accountants I work for told me to do it like that but it does come together (just watch the VAT return, as it posts the JNLs which credit stock and debit purchases to Box 7 but they should be in Box 6!)
