I have just finished my year end cleaned up many of the Debtors and Creditors and am now going into configurations to change my preferences from Standard VAT to Cash accounting can anybody give me some information that would make this change over easier, as I have had no experience with Cash Accounting and the company I work for do not have Sage support
You can only change over the VAT settings if all transactions are VAT reconciled.
Please ensure you are comfortable that with this as if you 'reconcile' any transactions that are not on your submitted returns they wont we included in future VAT returns.
I say this as I have seen a client do just this and reconciled a whole batch of historic transactions which had not been declared....
Cash accounting wont make any difference to the way you post data into Sage, it will however effect the VAT returns as only those invoices that are paid / received will be included in the VAT returns.
It is good practice to do the VAT wizard each quarter when you submit the VAT return as then the amounts left in the Sales & Purchase nominal accounts will be the VAT due on the Debtors / Creditors.
I have a report layout which will show the VAT on the Aged listings - if you would like a copy to assist in these reconciliation's please let me know and I will email you a copy.
Hope that helps
Jeremy
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Hi Jeremy, I am going to reconcile my VAT for the quarter: May- July, which will leave me with a list of outstanding Debtors and creditors balances, which have been cleared in August, I shall enter these payments once I have changed my company preferences to cash accounting, I am just worried as to how to edit my Vat codes and which ones to edit.
Be very careful in cash accounting when posting purchase payments where the invoice is paid in advance or missing. When you post the payment, and there is no invoice to match it to, sage will ask you what tax code you wish to chose for the payment. If you chose T1 then the vat re: the payment will be included on the vat return. Old adage but you cannot claim input tax without the invoice, also when you do get the invoice it may not be T1, It maybe a mix of different tax codes. If I post a payment without an invoice to match it to I chose T9 as the tax code of choice and fix things when I receive the invoice.
As per usual it does not matter if you receive a receipt in advance, known to be re: s/r, Vat man will want his vat on that even without the sales invoice being raised :)
