Having recently transferred accounting system to Sage, I am just about to run my first VAT return for period 01-Jun - 31-Aug. On calculating the VAT return, I am asked if I wish to include unreconciled transactions. As per my recent training I have said "yes" and included these. Almost half of the transactions are unreconciled. Do I need to adjust the VAT return once I have checked the period against the control accounts for Jun-Aug?
I think I should, but as I am still in need of a bit of hand-holding, I just wondered if anyone would be good enough to tell me that it is the correct thing to do?
Hi Janine It is probably worth trying to work out why these are unreconciled first - eg is it perhaps that you received late invoices that should have been included in the previous return (in which case they can be left in) or is it the case (as with a company Ive just picked up) that some of these were from before the company registered and they may not want them in the return. It also might be worth checking you have keyed your tax codes correctly eg make sure you have keyed all wages/bank interest and journals as T9 rather than T0 - if they are keyed as the latter then the system will included such items in the VAT return which might account for some of your items.
If you do an 'audit' report you can view this on screen and it will show you which items have been reconciled or not in previous returns.
Im not sure if there is a way you can include some unreconciled but not others - I will be asking that question myself in a minute so might be worth watching both threads (fingers crossed!)
Hope this makes sense/helps (sorry a bit rushed as so much to do and stressed!)
__________________
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
Have you verified that the un-reconciled transactions should be on the August return? So, was the company VAT registered prior to June? Have these items definitely not been picked up on the previous return? Should they have been? If the answer is yes to all, then you are correct to include them on this return.
If they should not be on the return, you will need to consider how to fix them. If you are stuck for time, you can run a return up to may and hit reconcile, and then do journals at a later date to correct
If some items should be included, and some shouldn't, run the May return, print the detailed report, then hit reconcile. Manually adjust the August figures to include those that should be included, and then do journals to fix the ones that shouldn't. Once you are done, and have run the VAT transfer wizard, your VAT liability account should match what needs to be paid
Thanks so much for your reply. I think as the financial year starts on 1 April and I am trying to produce a return for June - August, there hasn't been a VAT return for March - May, which we produced on a different system last time. I don't know how to get around this.
I am happy that I have boxes 1 - 5 correct, but I am now having a bit of a "moment" with regards to total sales and purchases for the period.
I am also a bit worried about how I can avoid these 149 transactions being included with the period I am working on! As I say, because there has been no previous return on Sage as I only set it up a few weeks ago.
When it comes to reconciling the return, you agree to flag transactions for VAT, but I don't know if you can pick and choose individual transactions to process or not?
I am wondering whether I should run a VAT return for April - May-13 so that the system does not include these items on the period I am tying to produce?
Thanks Joanne, don't stress....must be choccie time!
Yeah just run a return to May, that picks up all those unreconciled transactions, PRINT THE DETAILED (just in case!) and then reconcile it. Then you can start August in the usual way. YOu will need to consider the effect of any VAT included on the May report - has it already been posted into sage via the journals, and so is technically duplicated.. that sort of thing
If some items should be included, and some shouldn't, run the May return, print the detailed report, then hit reconcile. Manually adjust the August figures to include those that should be included, and then do journals to fix the ones that shouldn't. Once you are done, and have run the VAT transfer wizard, your VAT liability account should match what needs to be paid
HTH
Michelle
Hi Michelle
Knew would know a way round this!! Sorry but Im being well thick today (too busy stressing) - when you say manually adjust and do journals - can you advise how/give me an example?
Jo
__________________
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
I am hoping it will be quite straight forward. All opening balances/journals were as at 31-Mar, so I am assuming (hoping!) that the VAT return from 1 April will not include duplications.
Manually adjust -
once you have created a detailed report up to May, print it, and reconcile (take a back up first ladies!!)
highlight the items on the unreconciled report that needs to go on the return you are doing
Create a note on your file to show the additions of these items and the VAT boxes they will go into
Print the VAT return from sage for the current quarter, write your adjustments on it, to get to you file-able figures.
File the figures, run the reconcile
Then you will have to consider any un-highlighted transactions and how they are affecting sage
Journal the fileable figures from SATC and PTCA to the VAT liability account, so that it balances to whats going to be paid. Look at what's left in SATC and PTCA.. it should be just debtors and creditors if the client is on cash accounting. It should be NIL if on invoice accounting. (assuming nothing for september has been posted yet)
If the figure in SATC and PTCA are not what you expect, identify the transactions that are causing the imbalance.. this could be done by printing of the nominal report for those accounts, and looking for those unhighlighted figures.
If say, an item has been posted with a T1 VAT code, but should have been T9, you will need to journal the VAT back to its P&L code
Getting ready to go to see Wicked, sorry its rush!
Thanks LOADS Michelle for the detail - reckon I will be busy tomorrow. Go get your glad rags on and enjoy - friend of mine went yesterday and loved it. Have fun
__________________
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
Now there is an offer Michelle - might just take you up on that. Not helping as I cant access it at home where I am now and might fall into place when I can see what Im doing on Sage.
We are jealous about the food/booze/show arent we Janine! Actually even your mouldy snackajack sounds great at the mo - Im on a caffeine binge so will probably be up all night feeling wired. Have a great evening both of you ....hope there arent too many hangovers around!
__________________
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
too busy stressing) - when you say manually adjust and do journals - can you advise how/give me an example? 
