Normally when I make a VAT adjustment in sage, say for fuel scale charges, I make the adjustment within the vat return which then posts a journal to vat adjustments and the control account. Now I need to reclaim some vat from a bad debt. Am I better doing a manual journal (credit bad debt debit purchase vat) and noting what I have done for vat purposes rather than letting sage do its thing, which if I'm looking at it correctly is the completely wrong thing?
-- Edited by Rhianrach on Wednesday 25th of June 2014 10:15:14 AM
Sage should post the Bad Debt correctly. If you are not happy with it, then do it manually.
Do note that Sage, by default, does not post T9 VAT entries to the VAT Return, but does post them to the Control Account. You should reconcile the Control Account against the VAT Returns, to make sure these adjustments are correctly dealt with.
Yup the bad debt is posted fine, the issue is with sages posting of adjustments to the vat return. I think I answered my own question whilst typing it out in that it should be done manually rather than leave it for sage to sort as it would just post to liability and adjustments rather than purchase tax and bad debt.
If you raised an invoice and it was never paid, surely you have two situations?
A.. Standard VAT
You post the sales invoice and pay the VAT
You post a credit note (net amount to go to bad debt instead of sales) and claim the VAT (reduction to sales VAT)
B.. Cash VAT
You post a sales invoice. Its never paid, so the VAT is never declared on a return. The credit note clears the invoice, and removes the VAT from the sales tax control account
