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suzie13
May 11, 2021
Solved

VAT Cash accounting doesn't pick up the payment if the inv is dated in a later vat period. & If you have payments on account from customers they only show if matched.

  • May 11, 2021
  • 2 replies
  • 0 views
eg VAT period Apr-Jun. Inv 1st July, paid on 30th June so payment does not come up on apr-jun vat return even though VAT cash accounting selected. Customer paying monthly to spread the cost over a year for an annual invoice, if payment put to payee and debtor it does not come up on vat cash accounting unless raise and match an invoice for those payments. This then means errors in the VAT return unless manually check amounts received are all in VAT return. Any suggestions on how better to process these so they don't get missed off the VAT return?
Best answer by GeorgiaC

We do a deposit to payee and debtors, which I believe has the same affect as a receive payment as I just tested it. Neither come up on the VAT return. 


Hi suzie13, it's not possible to allocate a VAT code against the debtor's account on a bank deposit, so if no VAT code is selected here then this will not post to the VAT return. You may instead wish to record the payment on account using a journal entry, as you can select a VAT code against the debtors account here as well as select the payee, and then link this to the invoice as the payment once this has been raised. If the journal is dated within the current open VAT period then this will show on the return once posted. 

 

Please get back to us below if you have any questions 🙂

2 replies

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MirriamM
May 12, 2021

Hi there, @suzie13.

 

The information reported on the VAT return are those paid Invoice/Bills or Expense/Bank Deposit. For example, you have an invoice for January, and payment is in April. The invoice will be reported on the Vat return in April and not in January. Thus, it's not the payment that reports on the VAT return that is the invoice where the payment is applied. 

 

To know more about handling your VAT returns, see these helpful articles:

If there's anything else I can do for you concerning QuickBooks, feel free to reach back out. I'll be more than happy to assist. Have a great day.

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suzie13Author
May 12, 2021

Hello, 

yes the problem is if the payment is made ahead of the invoice or payments on account as per my examples. In these circumstances it does not bring the amounts up in the VAT return. This is a function that had been around for years in the likes of Sage so I'm surprised its not a function in QBO. If I am invoicing for July to September rent, the invoice date should be 1st July but if the payment is made on 30th June, ahead of the invoice date, cash accounting will not bring up the payment. I have put this client back on accrual accounting because of this problem. 

And my other example where customers pay monthly to spread the cost for an annual invoice, if the invoice isn't raised until the work is actually done the payments are put to the customer and debtors which are matched against the invoice once its raised, VAT cash accounting does not pick up these unmatched POA's.

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EmmaM
May 12, 2021

Hello Suzie13, Thanks for the further detail, how are you recording the payments on account are you doing a deposit or a receive payment or credit note and then applying to the invoice on the 1st?

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Birmingham Bookkeeper
May 27, 2022

Here we are now May 2022 some 12 months since this post and Would you believe it something as basic as this still not sorted out. I have this exact problem now. Journal.is a work round buy guys ... please...  come on ... 

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