Second hand car dealership use margin scheme. New client to me - all done incorrectly as they have been including internal and other costs in calculations of 'cost' of car instead of just the purchase price. So now I have to back track this quarter and adjust the VAT (by Thursday!!).
All made a bit easier, I reckon, by the fact that there are no customer accounts to worry about. Invoices are issued to just one a customer account called 'cash sales'. When invoices were issued, mostly they were adjusted as they were input into sage to show amounts with no tax, then another line with the profit element, keyed with T1, calc net to arrive at the VAT. Worked pretty well, apart from as I say the wrong 'profit element' has been used. Payments from customers were automatically keyed to the invoices.
Added to this some invoices were keyed without this calculation being done at all, but still with the customers payments allocated to these invoices.
So essentially the 'customer' cash out is nil (well it will be when Ive sorted a couple of other niggles).
So now I need to do some adjustments to take the additional amount of VAT that is owed - all the calculations have been done but I need to key the adjustments.
So essentially, as far as I think with a battered brain - I need to reduce sales/increase VAT by the adjustment account and was thinking of doing this via a journal.
Given my comment in December thinking VAT couldnt be applied via a journal (Vince, you MAY recall this one but Ive not had two minutes to go back to it yet!) - can you please give me an idiots guide how to key it to ensure this is done correctly, with T codes please.
In normal circs I would back up, try it and check the VAT accounts etc but given both my time constraints AND (more so) the fact that the sage customer is using is from 2003 and dying on its ar8e (dare I say that - sorry Shaun!! He probably wont read this anyway as its sage!!), and takes about an hour to run a report, I thought it best to ask on here. Understand you are all probably under the kosh too - but hope you take pity on me and answer!!!!!!!!!
Thanks all
Keeping my fingers crossed for one of the gang to be on.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Yes, I am a bit rushed... so I've only read your full post very quickly. The basic question you're asking is how to do a journal to reduce sales and increase VAT.
Dr [sales code] with the VAT amount, T9. Cr [output tax code] with the VAT amount, T1.
The T9 for the debit is arguably incorrect, because you'd want to reduce the net outputs shown on the return as well, and a T9 will be ignored - but with a journal, the nominal account used doesn't determine whether anything (outwith the input/output VAT codes) is treated as inputs or outputs: it's whether it's a debit or credit that determines this, so if the debit was T0/1, instead of decreasing the net outputs, it'll increase net inputs. T9 is, in effect, the lesser of two evils.
Edit: Just spotted your comment about the age of the software. I remember the other discussion about journals and VAT returns, and ISTR suspecting they've always been included, but not being sure of it. If in doubt, you might be better off using a dummy payment and receipt to make the adjustment instead.
'Pay' the adjustment to the sales code, with the adjustment amount in the net and nothing in the VAT amount, with the tax code set to T1, then post a receipt, this time with zero for the net, and the amount being adjusted in the tax column, again T1.
That should work - provided in my rush I've not misunderstood completely - and it'll also have the benefit of correcting the net outputs as shown on the return.
-- Edited by VinceH on Tuesday 5th of January 2016 08:11:53 PM
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
Instead of doing a journal, do a dummy/matching (in total) payment and receipt:
The payment will be to sales (i.e. as if you're refunding someone), with the whole amount to be adjusted in the net column, set as T1, but with zero in the VAT column. This will have the effect of reducing the net outputs figure.
The receipt will also be to sales, but this time zero will be in the net column (so it's not *really* a receipt to sales), set as T1, and the *whole* amount in the VAT column. This will have the effect of increasing the VAT outputs figure.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
I had my usual dummy Bank thing in mind but thought I was wrong. So much for trying to do work on hardly any sleep. Do more damage than good, except the other stuff I can do in my sleep.
Thanks LOADS - I really appreciate it especially knowing how busy you must be.
BTW - Happy New Year!!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
