Hi Please could anyone help with regards to the VAT reconciliation? I have just taken over a part time position using sage accounting software version 19. the accountant has advised to include all unreconciled items from a previous reconciliation and there are 69 items according to the report. I just need to understand how it works manually so that I can ensure I do everything I need to do to ensure the VAT is correct and accurate. I have the report which feeds through the total vAT on sales and on purchases and the difference is reundable in this case. I am just not too sure from 1/7/12 to 31/12/12 second quarter, which 69 unreconciled items are included because there are more than 69 items with the letter N at the side of them. Our accountant said to reconcile them to make sure that they don't reccur next quarter. Can anyone help please I think I am not quite understanding, I thought the software would include everything and it should be correct, am I wrong?
You can run two VAT reports (each time without going as far as reconciling the results) - one report with, and one without the earlier period's unreconciled postings. Compare the two lists of transactions and you will have identified the 69 unreconciled items.
Hope that sets you off in the right direction. Andy
You might find it easier to run a VAT return for the date range of the last quarter, excluding reconciled items. This report will only include transactions dated in the previous quarter but not included when that that return was "reconciled".
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Sheelagh Lyons Bookkeeping Clarity Making Bookkeeping Clearer
The answers I provide are meant as a general guide only and do not constitute advice.
First let me explain you how sage does the VAT reconciliation and what unreconciled items on sage are.
When you run a VAT return (Company - Financials - VAT Return) for a period, in your case from 01/07/2012 to 31/12/2012, VAT includes all the items posted with VAT codes T0, T1, T2, T4, T5, T7 and T8. You then press the reconcile button at the bottom, then VAT treats these as reconciled and would not show these items again when you run the VAT for the same period.
However, when you post an invoice with any of the VAT codes mentioned above, after reconciling the VAT, now VAT retun shows on the new transactions on the report as these are not reconciled yet.
Coming to your case, firstly i understand that the VAT period you are talking is for 6 months and not 3 months. So i believe VAT return for the period for the 01/07/2102 to 30/09/3012 is already submitted. So, those 69 transactions which currently showing on sage relates to invoices posted in the period prior to 30/09/2012.
Best way to reconcile manually and double check the VAT figures, you need to follow the 5 step rule below:
1.) Print a copy of VAT return which has been previously submitted to period 01/07/2012 to 30/09/2012
2.) Run VAT return on sage for the period 01/07/2012 and 30/09/2012 now. Note: Donot include reconciled items. Here you will get the 69 unreconciled transactions in their appropriate VAT boxes. Print VAT summary and VAT detailed report from sage
3.) Now run the VAT return for 01/10/2012 to 31/12/2012 but donot include unreconciled items of prior period. This will shows what VAT is for the current quarter.
4.) Now you run the VAT return for the entire 6 months starting from July on sage and include reconciled figures.
5.) To check whether VAT return is right, add the VAT due of step 2 and step 3 above, this must be equal to step 4 VAT figure.
