I've given myself a headache trying to think this through so am hoping one of you lovely lot may be able to help (*please*)
First up: Sage (I know, I know) was set up as standard accounting for Vat when it should have been cash accounting. We're 4 months in to processing transactions so know it's not going to be easy to rectify but I'm confident that it's do-able. We started using Sage in January (previous accounts done manually so not in Sage) and the vat quarter ran from Nov to Jan. The previous bookkeeper did that quarter and I have the opening balances etc
So, Query 1: As Sage is set for standard and January return was done cash accounting, should I run the vat return in Sage for January only and adjust the figures to match the January element of the actual return?
Query 2: If I do as Query 1, the January return will need to be reconciled so what will happen to the transactions that are in Sage for January but that weren't picked up when the return was done manually?
Second up: When the accountant gave me the year end trial balance to enter in to Sage he also let me know what the output and input tax elements were for January as per the previous bookkeeper. However, I have run several reports for January and cross referenced what she says she included in the return but have found that there is about twenty supplier payments made on the 25th January (which were for December invoices) that aren't included in the input tax figure for January as per the accountant.
So, Query 3: Why would this be? Why would the previous bookkeeper not include those payments? I feel like I'm either missing the reason why or she has made a mistake...which I now have to recify as well as sorting out the pickle above!
I feel like I'm going slightly mad so if anyone can help explain/comment on any of the queries I'd be very grateful ...and will send vitual cake!
Draw a line at 31 January! Make sure every entry from that date is correct, so your 30 April Return is fully correct for Cash Accounting. For entries up to 31 January, you will need to spend some time checking and reconciling the entries, picking up what was missed, and preparing a schedule of underclaimed input tax, which you should be able to include on the 30 April Return (assuming the adjustment is less than £10,000). I would not worry about why your previous bookkeeper missed some entries, although of course there may be a pattern. Make sure entries are corrected now. When you re-run the January Return, you can reconcile it again, so it does not duplicate the entries on the 30 April Return.
