Hi.
I use Quickfile to operate my vending machine business.
I have a ‘client’ setup called Machine Cash Sales.
As my takings appear in the banking section I wanted to assign each credit to this client and then at the end of the month total it all up and produce an invoice for the same amount.
When I go to assign it to this client it asks me which rate of VAT to apply, I’m trying to work out what difference this makes when assigning? I normally total up all the credits on a spreadsheet that gives me my excl VAT total and then obviously the QF invoice adds the VAT and it matches whats paid in, but with credits every day I’d rather spend two minutes tagging each day rather than do a months worth at a time.
It sounds like you’re on cash accounting for VAT, which means you need to account for the VAT when you receive the funds.
In this case, you’re in effect taking a “prepayment” from that client, so the VAT needs to be recorded and accounted for on a return. However, when you allocate this to an invoice, if the amount is different, QuickFile will adjust it on your next return.
So when I allocate it I select 20% VAT, Thats all that’s confusing me if I’m honest.
So, allocate as a prepayment at 20% VAT
then at months end, I total up all the allocated prepayments and create an invoice for the same amount and it should all work happily?
Because you’re on cash accounting, the VAT needs to be accounted for at the time of the money being received. When you’re tagging this to a client, you’re declaring it’s been received and therefore need to account for the VAT on it - hence, 20%.
Let’s say you take £10.00 in sales and allocate it to the client with 20% VAT - the payment is still £10.00. When it comes to recording the invoice, you would record it with the correct VAT, and then allocate the payment. QuickFile will automatically adjust your VAT return on your account if your invoice is different to what you recorded as a prepayment.
