I'm a bit stuck with an invoice and could do with some advice. One of our clients has made a purchase of goods from Germany. The total on the invoice is in Euros, however, the bank account they state to pay the invoice to is a UK account and the invoice was paid in £. Is it OK to just post the invoice as the amount paid in £? I would then have to remember to fish it out as a purchase from EU on the VAT return?
It's Sage 50 accountants/professional. (sorry, I'd put that in my original draft and must have edited out before posting). I can't remember which version it is, not the latest but a fairly recent one I think. I'll have to look it up tomorrow when I'm back in work. I had a look at the Sage help files and I can't work out how the currencies thing works. I don't think we have the foreign module.
It is possible they will be a regular supplier. I've not keyed in anything yet, the T code will be zero. The invoice is in Euro, the payment was in £ (I asked them how/what they paid). For this client I use Sage, only to produce the figures for their VAT returns, and using just value of purchase invoices/credit notes and till sales. So I suppose, in the interests of consistency, I should use the converted Euro amount to post the invoice. A bit of background...they are on a VAT retail scheme and my boss works out their VAT liability every quarter from the reports I print out. Then I do a couple of postings to get the figures right so I can reconcile the VAT return - this bit is a Sage getaround. I never see the bank statements, however, there is a reconciliation done at the end of the year by my boss (the accountant), presumably when he gets all the documents and does the accounts.
When I say fish it out, I mean if I post it in £ would it flag as a foreign purchase in box 9 (because the supplier is in Germany) or would I have to manually adjust the VAT return? I've only dealt with UK suppliers with the VAT returns I've done so I don't know how the software usually treats it.
I hope this makes sense. It is probably much less complicated than I think it needs to be.
Hi again
Pro version comes with foreign trader as standard. You can set up the supplier as being in euros rather than sterling, but what I wasn't sure of was if you could then pay the invoice from a sterling bank, so after I did you a response I had a play with sage. You can't unfortunately. It would need paying from a euro account.
If irregular I would enter it as a Bank payment, but if regular as you indicate I would enter as a supplier.
Either way enter the euro amount of the invoice value in you description box plus the rate used to convert if it fits. I also annotate the invoice.
Care because if they have actually sent euros the bank will obviously have taken the amount in sterling from their bank account but this may also include a small amount as a charge, so you need to find this out and debit the charge to bank charges nominal. You can find this from the advice the bank will send your client- get them to send you this as part of your paperwork pack.
Only issue is if the invoice and payment span two different VAT quarters, then you would have to key the conversion rate using HMRCs website rate (or from some other 'reliable' source to get the invoice on the return (which is why setting up a supplier is better) and then do any adjustments when you know the actual rate.
Other main issue is that this is not a T0 tax code. I'm not in front of sage at the mo, but seem to recall its either T23 or T24- by using one if these will dump it in all the correct places on the VAT return. Go to configuration, tax rates and you can scroll through to see which one is correct for your scenario.
HTH
__________________
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
Hi again
Just logged on to sage and the T codes I mentioned are for services. For goods you need T7 or T8. There is one for standard and one for zero rated items
__________________
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
