Hi Trojan

When using cash accounting, Sage wont let you clear invoices, if there is a mismatch on tax code. I tackle this by using a dummy bank account.

For all deposits on account, from pre-registration, that haven't been cleared yet

Before posting any sales receipt to the current account or cash -

Through the dummy account, do a customer receipt for the full invoice, then a customer refund for the deposit (sage should allow you to do this as a T9). You should then find the balance on the dummy account equals the actual money received. You can then journal/bank transfer this balance to 1200 or 1230 to match up to the bank statement or cash tin.  

Where the deposit was forfeited, there wont be any need for a journal/bank transfer, as the dummy account should come back to NIL.  

Doing it this way also sorts the sales VAT out, correctly.

For items where the sales receipt has already been posted

Now, you will have posted sales receipts via the bank/cash already.  As I understand it, you will have:

A T1 sales invoice for the full amount

A T9 payment on account

A T1 payment on account

Regards the invoices where the service was provided -

If you posted a net sales receipt on account, the VAT on that receipt would have been 1/6th of the receipt, not the sales invoice.  This suggest you will have understated the VAT, so we will need to make sure any missed VAT is picked up on the next return.  For example

T1 full sales invoice £120

T9 POA - £20

T1 POA - £100     ......only £16.67 will have been picked up on the return, instead of £20. ( you should check your VAT returns as you go through to confirm what's actually been declared)

So, using the dummy account, allocate the T1 POA to the T1 sales invoice (if you havent already) then clear the balance on the T1 sales invoice with another sales receipt - this will adjust the next VAT return accordingly and clear the full invoice.  A debit balance will appear on the dummy account.  Then customer refund the T9 deposit through the dummy account (sage should give you an option to select this be a T9 transaction), and this should bring the dummy account to NIL as well as the customer account. 

Where the deposit was forfeited - the T9 POA means no VAT has been picked up, at all - using the dummy account, clear the T1 sales invoice in full, then create a T9 customer refund

I would do one at a time, so I could keep getting back to NIL - that way you wont get yourself in a tangle!  However, if you dont want to do it that way, create a new bank account for the dummy (instead of renaming one) , so that it has the reconciliation function - using this, you can reconcile the transactions that net off to NIL, and identify any that dont.

The VAT is all important here, so when doing the next return, double check that no customer refunds have calculated VAT on them.  Do one account and run the return, and see how it looks maybe?

-- Edited by FoxAccountancyServices on Saturday 19th of September 2015 09:35:42 PM